Returns & Safety

What is Interest Coverage?

How many times operating profit covers the interest bill.

How it is calculated

Operating income divided by interest expense.

How to read it

Above 5 is comfortable. Below 2 leaves little room for a bad year. Withheld when interest is too small to matter.

Where the numbers come from

Scrutar computes Interest Coverage from the figures each company reports to the SEC in its annual and quarterly filings, using the XBRL data attached to those filings.

More Returns & Safety metrics

ROICReturn on invested capital: the after-tax profit the business earns on all the money invested in it, from lenders and shareholders alike.How to read it →Net Debt / EBITDAHow many years of operating cash earnings it would take to repay net debt.How to read it →Effective Tax RateThe share of pre-tax profit paid as income tax.How to read it →

See it for a real company

Ten years of Interest Coverage and every other metric on this page, for every company Scrutar covers, computed from SEC filings.

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