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Interest Cover

The interest cover ratio gives an indication of the ability of your business to meet ongoing interest bills and therefore service debt.

Use information from your business' annual profit and loss statements to input into the calculator.

For information on using this calculator see below.

Interest expense amount $ Field required
Leasing amount $  
Net profit before tax $ Field required
A red star Field required indicates a mandatory field.
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The following ranges are a general guide only.

  • Above 2:1 indicates a good interest cover position.
  • Between 1.5 to 2:1 indicates average interest cover.
  • Between 1.0 to 1.5:1 indicates some weakness that may require attention.
  • Below 1 indicates that interest cover is insufficient to cover ongoing finance expenses.

Ratios should be considered over a period of time (say three years), in order to identify trends in the performance of the business.

The calculation used to obtain the ratio is:

Interest Cover Ratio = (Net profit before tax + Finance expenses)/Finance expenses  
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NOTE: The calculator is provided for illustrative purposes only and the calculations are based on the accuracy of the information provided by you. The information about the calculators and the results of the calculations are necessarily general and are only intended as a guide. When deciding on what your business will do, many factors need to be considered, including your business' situation and financial position.

ANZ will not store the information provided in this calculator.