Operating income to interest expense ratio is a measure of a company’s ability to pay off its interest expenses using its operating income. It shows how many times the company can cover its interest payments with its operating income. It is also known as interest coverage ratio or times interest earned ratio. The formula for operating income to interest expense ratio is:
Operating income to interest expense ratio = Operating income / Interest expense
Where:
- Operating income is IS011,
is_oper_income
- Interest expense is IS014,
is_int_expense