MarketXLS

Interest As A Percentage Of Invested Capital (Historical)

Returns the interest expense expressed as a percentage of total invested capital. This metric helps assess how much of the capital base is being consumed by debt servicing costs.

Understanding the Metric

This ratio is calculated as:

Interest % = (Interest Expense / Invested Capital) * 100

Where invested capital typically = Debt + Equity

This shows:

  • The cost burden of debt financing
  • How much return must be earned just to cover interest
  • The impact of leverage on returns

Parameters

Parameter Description
Symbol Stock ticker (e.g., AAPL, MSFT)
Year Fiscal year or period code (lq, ly, lq-1, ly-1, lt, lt-1)
Quarter Optional: 1, 2, 3, or 4 (default: 1)
TTM Optional: "TTM" for trailing twelve months

Interpretation

Ratio Interpretation
< 1% Minimal interest burden
1-3% Moderate debt cost
3-5% Significant interest expense
> 5% Heavy debt servicing burden

Syntax

=hf_Interest_as_a_percentage_of_invested_capital(Symbol, Year, [Quarter], [TTM])
Excel Desktop (Windows)

Parameters

symbolstringRequired

Stock ticker symbol

yearstringRequired

Fiscal year (e.g., 2023) or period code (lq, lq-1, ly, ly-1, lt, lt-1)

quarterstring

Calendar quarter (1-4)

TTMstring

Set to 'TTM' for trailing twelve months

Returns

number

Interest expense as a percentage of invested capital

Examples

=hf_Interest_as_a_percentage_of_invested_capital("AAPL", 2023, 4)
Q4 2023 ratio
=hf_Interest_as_a_percentage_of_invested_capital("T", "ly")
Last fiscal year
=hf_Interest_as_a_percentage_of_invested_capital("MSFT", 2023, , "TTM")
TTM value
=hf_Interest_as_a_percentage_of_invested_capital(A1, B1, C1)
Cell references
=hf_Interest_as_a_percentage_of_invested_capital("VZ", "lq")
Last quarter

When to Use

  • Analyzing debt cost burden
  • Comparing financing efficiency
  • Understanding capital costs
  • Evaluating leverage impact
  • ROIC vs interest spread analysis

When NOT to Use

Scenario Use Instead
Need interest coverage hf_Interest_coverage_from_continuing_operations()
Need absolute interest expense hf_Interest_Expense()
Need ROIC Check return on invested capital functions
Company has no debt Ratio will be zero

Common Issues & FAQ

How does this relate to ROIC?

Compare this ratio to ROIC. If ROIC > Interest%, the company earns more than its debt costs. If Interest% > ROIC, leverage is destroying value.

Why is this ratio low for tech companies?

Tech companies often have minimal debt and large equity values, resulting in very low interest as a percentage of total invested capital.

What causes this ratio to increase?

Rising interest rates, increased debt levels, or declining equity value can all increase this ratio over time.

Related Formulas

More MarketXLS Historical Fundamentals formulas you can use in the same worksheet:

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