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Discussion Paper

Interest Coverage Ratios: Assessing Vulnerabilities in Nonfinancial Corporate Credit


Abstract: This note examines whether the ability of nonfinancial corporations to meet their interest expenses out of earnings is a vulnerability for financial stability under current economic conditions. We measure this ability using the interest coverage ratio (ICR)—the ratio of earnings before interest and taxes relative to interest expenses—and project this ratio under different scenarios.

https://doi.org/10.17016/2380-7172.2779

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Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: FEDS Notes

Publication Date: 2020-12-03

Number: 2020-12-03-1