Merge pull request #480 from roberanegussie/interest_coverage_ratio

Interest coverage ratio

DOCUMENTATION.md

@@ -71,3 +71,8 @@ The initial price of the product or service. |
 |                             |                                        | - `interest_rate` (float): The annual interest rate on the savings. |
 |                             |                                        | - `goal_amount ` (float): The desired savings goal amount. |
 |-----------------------------|----------------------------------------|----------------------------------------------------------------------|
+| POST /interest_coverage_ratio | Calculate interest coverage ratio    | - `revenue` (float): The amount of income generated through business operations.  |
+|                               |                                      | - `cost_of_goods_services` (float): Total amount of costs spent on goods and services.|
+|                               |                                      | - `operating_expenses` (int): The amount of operating expenses. |
+|                               |                                      | - `interest_expense` (int): The cost incurred by an entity for borrowed funds. |
+|-------------------------------|----------------------------------------|---------------------------------------------------------|

ENDPOINTS.md

@@ -2305,4 +2305,27 @@ Sample Output
     "months_required": 18,
     "total_contributions": 3600,
     "interest_earned": 315.27777777777777
-    }```
+    }
+```
+
+**POST** `/interest_coverage_ratio`
+
+- Request body : `{
+  "revenue": 150000,
+  "cost_of_goods_services": 50000,
+  "operating_expenses": 40000
+  "interest_expense": 16000
+}`
+- Sample output
+
+```py
+{
+  "Tag": "Interest Coverage Ratio"
+  "Revenue": 150000,
+  "Cost of Goods and Services": 50000,
+  "Operating Expenses": 40000,
+  "Interest Expenses": 16000,
+  "Earnings Before Interest and Taxes": 60000,
+  "Interest Coverage Ratio": "3.75%",
+}
+```

helpers/functions.py

@@ -2068,3 +2068,11 @@ def calculate_modified_internal_rate_of_return(ending_cash_flow: float,
                                                 number_of_periods: int):
     mirr = ((ending_cash_flow / initial_cash_flow) ** (1 / number_of_periods)) - 1
     return mirr*100
+
+# Function to Calculate Interest Coverage Ratio
+
+def interest_coverage_ratio(revenue:float, cost_of_goods_services:float, operating_expenses:float, 
+interest_expense:float):
+	EBIT = revenue - cost_of_goods_services - operating_expenses
+	ratio = EBIT / interest_expense 
+	return ratio

main.py

@@ -135,12 +135,13 @@
 from tasks.cash_conversion_cycle import cash_conversion_cycle_task
 from tasks.financialAssestRatio import financial_assest_ratio
 from tasks.PolicyPremium import calculate_policy_premium
-from validators.request_validators import SimpleInterestRateRequest, calculatePension, compoundInterest, futureSip, paybackPeriod, capmRequest, DebtServiceCoverageRatio, futureValueOfAnnuity, futureValueOfAnnuityDue, ProfitPercentage, LossPercentage, DefensiveIntervalRatio, CashConversionCycle, RateofReturn, financialAssestRatio, PriceElasticity, PolicyPremium, AveragePaymentPeriod, ModifiedInternalRateOfReturn
+from validators.request_validators import SimpleInterestRateRequest, calculatePension, compoundInterest, futureSip, paybackPeriod, capmRequest, DebtServiceCoverageRatio, futureValueOfAnnuity, futureValueOfAnnuityDue, ProfitPercentage, LossPercentage, DefensiveIntervalRatio, CashConversionCycle, RateofReturn, financialAssestRatio, PriceElasticity, PolicyPremium, AveragePaymentPeriod, ModifiedInternalRateOfReturn, SavingGoal, InterestCoverageRatio
 from tasks.financialAssestRatio import financial_assest_ratio
 from tasks.PriceElasticity import calculate_price_elasticity
 from tasks.average_payment_period import average_payment_period_task
 from tasks.Saving_Goal import saving_goal
 from tasks.modified_internal_rate_of_return import calculate_modified_internal_rate_of_return_task
+from tasks.interest_coverage_ratio import interest_coverage_ratio_task
 
 # Creating the app
 app = FastAPI(
@@ -274,6 +275,8 @@ def index():
             "/loss_percent": "Calculates the loss percentage",
             "/average_payment_period": "Calculate Average Payment Period a metric that allows a business to see how long it takes on average to pay its vendors.",
             "/modified_internal_rate_of_return": "Calculate modified internal rate of return",
+            "/interest_coverage_ratio": "Calculates interest coverage ratio",
+
         },
     }
 
@@ -1996,3 +1999,14 @@ def saving_goal(request: SavingGoal):
     request.monthly_contributions ,
     request.interest_rate, 
     request.goal_amount )
+
+# Endpoint to calculate Interest Coverage Ratio
+
+@app.post(
+    "/interest_coverage_ratio",
+    tags=["interest_coverage_ratio"],
+    description="Calculates interest coverage ratio",
+)
+def interest_coverage_ratio(request: InterestCoverageRatio):
+    return interest_coverage_ratio_task(request.revenue, request.cost_of_goods_services,
+    request.operating_expenses, request.interest_expense)

tasks/interest_coverage_ratio.py

@@ -0,0 +1,21 @@
+
+from helpers import functions
+from fastapi import HTTPException, status
+
+
+def interest_coverage_ratio_task(revenue:float, cost_of_goods_services:float, operating_expenses:float, interest_expense:float):
+	try:
+		EBIT = revenue - cost_of_goods_services - operating_expenses
+		ratio = functions.interest_coverage_ratio(revenue, cost_of_goods_services, operating_expenses, interest_expense)
+		return{
+			"Tag": "Interest Coverage Ratio",
+			"Revenue": revenue,
+			"Cost of Goods and Services": cost_of_goods_services,
+			"Operating Expenses": operating_expenses,
+			"Interest Expenses": interest_expense,
+			"Earnings Before Interest and Taxes": EBIT,
+			"Interest Coverage Ratio": f"{ratio}%",
+		}
+
+	except:
+        	return HTTPException(status_code=status.HTTP_500_INTERNAL_SERVER_ERROR)

validators/request_validators.py

@@ -659,3 +659,9 @@ class ModifiedInternalRateOfReturn(BaseModel):
 	ending_cash_flow: float
 	initial_cash_flow: float
 	number_of_periods: int
+
+class InterestCoverageRatio(BaseModel):
+	revenue:float
+	cost_of_goods_services:float
+	operating_expenses:float
+	interest_expense:float