Interest coverage
What it measures¶
Interest coverage on the Fundamentals page is EBIT — earnings before interest and taxes, the operating profit — divided by the year's interest expense. A coverage of 5 means operating profit was five times the interest bill.
Why it is on the page¶
Interest has to be paid every year. The thinner the cover, the less room the company has before a weak year makes a payment hard to meet. It is the earnings-side companion to the debt ratios.
Thresholds, their source and the population they were fitted on¶
| Reference | Line | Source |
|---|---|---|
| warning floor | about 2 times | the product's research archive; rating agencies place their weakest grades below about 2 times |
- Fitted on: no statistical sample — the agencies' published grids.
- Evidence grade: practitioner convention.
The row draws no bar. The condition summary's Coverage check divides EBITDA (before depreciation) by interest instead, against a sector band and a 4.0 line — so its figure is higher than this row's for the same company.
A worked example¶
Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): interest coverage 19.69 — operating profit paid the interest bill nineteen times over.
What “No verdict” means here¶
The row carries no verdict of its own. It reads not applicable when the company pays no interest, and insufficient data when EBIT or the interest expense is not stored.
What the verdict is and is not¶
The figure describes one year's operating profit against one year's interest. It is not a credit rating, not a forecast, and not an instruction to trade the shares.