Learn · Explainer
Interest coverage ratio
How many times operating income covers the interest bill, with the figure for every company that reports interest expense.
The short answer
Interest coverage compares what a company earns from its operations with the interest it owes on its debt: operating income divided by interest expense. A coverage of 10 means operating income was 10 times the year's interest bill. Across the 57 companies in the table, the median is 10.3 times; 2 are below 3.
The formula
Interest coverage = operating income ÷ interest expense
Some versions use EBIT (earnings before interest and taxes, close to operating income) and some use EBITDA, which gives a higher number. Interest expense is its own line on most income statements, below operating income; the SEC's income statement rules list it as a separate caption. A few companies report it net of interest income, which makes their coverage look higher.
What it tells you
Coverage is a measure of cushion. A company covering its interest many times over could see operating income fall a long way before the interest bill became hard to pay. A low figure leaves less room, especially if the debt carries floating rates or needs refinancing soon. Lenders and credit rating agencies watch it alongside debt relative to earnings.
It says nothing about when the debt comes due, which is in the debt note, or about the size of the debt itself, which debt-to-equity covers. Utilities, telecoms and other capital-heavy businesses tend to carry more debt and lower coverage than software companies with little borrowing.
The debt-to-equity and interest coverage calculator works out both ratios from figures you type or load from a 10-K.
The lowest coverage in the table is CVS Health's, at 1.5 times.
Every company
Latest fiscal year from each company's 10-K, companies with positive operating income that tag an interest expense line, sorted from lowest coverage. Banks and other lenders are left out: interest is their main cost of doing business, not a financing cost.
Common questions
What is a good interest coverage ratio?
It depends on the industry and how stable earnings are. Among the 57 companies here the median is 10.3 times. Below about 2 or 3, small drops in profit start to matter for the interest bill.
Is interest coverage the same as times interest earned?
Yes. Times interest earned is another name for operating income, or EBIT, divided by interest expense.
Why are banks left out?
For banks, interest paid on deposits and borrowings is the main cost of the business, so dividing operating income by it doesn't measure debt burden.
Where is interest expense in a 10-K?
Usually its own line on the income statement below operating income, and in the debt note. Some companies show interest expense net of interest income.
Can interest coverage be negative?
Yes, when operating income is negative. The table shows only companies with positive operating income.
See it side by side
The same figures for two companies at once, each linked to its 10-K:
Disclosures
- Editor holdings
- The editor holds shares of Tesla (TSLA) and SpaceX in a long-term retirement account. The editor holds no position in any other company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 10, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.