Result
Debt/EBITDA
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Debt/EBITDA = total interest-bearing debt ÷ EBITDA. The ratio is conventionally expressed as a multiple (e.g. '2.5×') — a rough number of years of operating profit before interest, taxes and depreciation it would take the company to pay off all its debt if it put every dollar of EBITDA toward it.
This is a standard debt-load metric in bank covenants and credit ratings: values up to 2–3× are usually considered comfortable, above 4–5× signal elevated risk — but exact thresholds vary a lot by industry and cash flow stability.
The ratio ignores how much cash the company needs for ongoing operations and capital spending, so EBITDA overstates the real ability to repay debt — for a more accurate picture also check DSCR and free cash flow.