interest coverage
noun[U]
FINANCEukus(alsointerest cover)ameasureof theabilityof a company'sprofitsto make theinterestpaymentsonitsdebt:
Acompanywithstableearningsrequiresalowerlevelofinterestcoveragethan one withhighlyvariableearnings.
Theinterestcoverageratioiscalculatedbydividingearningsbyinterestpayable.