How it is worked out
Operating profit (EBIT) divided by interest expense over the last twelve months.
How to read it
- A higher number leaves more room if profit falls or rates rise.
Example
EBIT $1bn, interest $100m: covered 10 times.
Interest coverage
Debt and balance sheet
How many times operating profit covers the interest the company pays.
Related terms
Related pages
The other pages on US stocks, free to read. On the company pages, the last three fiscal years are open to everyone, five with a free account, and every year with Ploutos Investor.
US stocksThe market today, the sectors, the largest companies and the week's results.The market's sectorsThe 11 sectors side by side: returns, share of the market, median P/E and dividend.Compare stocksTwo companies side by side: price over up to ten years, with and without dividends, and every figure.US dividend stocksEach dividend's yield next to whether the company's cash covers it and whether it was ever cut.
Explanations of terms for learning, with examples from SEC filings.