by Dr Greg Chapman
This is another in the series of posts on Small Business Best Practice Benchmarks.
The Interest Cover Ratio is EBIT / Interest, where EBIT is Earnings before Interest and Tax. What this ratio indicates is how easily the business can cover the interest payments for any debt they are carrying.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.