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Interest coverage

How many times operating income covers interest expense.

In simple terms: How many times over the company's profit covers the interest on its debt.

Why should I care?
When profit barely covers interest, a bad year can quickly become a serious problem.
Calculated from reported figures

How it's calculated

Operating income ÷ Interest expense

In general, a higher value is considered favourable — but always compare within the same industry, because what counts as “normal” varies widely.

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