Definitions
EBIT Interest expense = (total profit interest expense) Interest expense= (Profit After Tax, Income Tax, Interest Expense) Interest expense. Significance
The interest protection multiple refers to the ratio of the company's operating income to interest expense, also known as the interest earned multiple or interest repayment multiple. Depending on the industry in which the enterprise is located, there are different standard boundaries for the interest protection multiple, and the generally accepted limit for the interest protection multiple is 3. The interest guarantee ratio not only reflects the size of the enterprise's profitability, but also reflects the degree of guarantee of profitability to repay the due debts, which is not only the premise basis for the enterprise's debt operation, but also an important indicator to measure the size of the enterprise's long-term debt repayment ability. In order to maintain normal solvency, the interest protection ratio should be at least greater than l, and the higher the ratio, the stronger the long-term solvency of the enterprise. If the interest coverage ratio is too low, the enterprise will face the risk of loss and debt repayment security and stability. As long as the interest protection multiple is large enough, the enterprise has sufficient ability to pay the interest, and vice versa. The focus of the interest protection multiple is to measure the ability of a business to pay interest, and without a sufficiently large EBIT, interest payment will be difficult. 
Case
A company's total profit in 20x0 is 40 million yuan, interest expense is 2 million yuan, total profit in 20x1 is 42 million yuan, interest expense is 3 million yuan, and the interest multiple obtained by the enterprise is calculated as follows: 20x0 interest protection multiple = (4000 + 200) 200 = 21 (times) 20x1 interest protection multiple = (4200 + 300) 300 =15 (times) Judging from the above results, it should be said that the interest guarantee multiple of the enterprise is relatively high, and it has a strong ability to repay the interest on the debt. Furthermore, it is necessary to make judgments based on the situation of the enterprise in previous years and the characteristics of the industry. 