Interest burden

Last updated: 25.03.2016

Interest burden is one of the indicators of indebtedness and financial structure and it shows what proportion of earnings before interest and taxes (EBIT) are used to cover interest expense.

It is inversed indicator to interest coverage, which is much more widely used in practice.

 

Calculation formula

 

The formula can include the total cost of borrowings instead of interest expense.

 

Interpretations and recommended values ​​

can be derived from the text presented within Interest coverage ratio.



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