Interest coverage measures a company's ability to service its debt from operating earnings. A ratio below 1.5 is a warning sign; below 1.0 means the company cannot cover interest payments from operations. It is a key metric in credit analysis and bond covenants.

How Strata computes this. Strata uses EBIT / interest expense — times interest earned, the CFA and debt-covenant convention — taking EBIT from reported operating income. Some sources quote EBITDA / interest instead, which is a legitimate leveraged-finance measure but a different, more permissive number, since it adds back depreciation and amortisation. Strata shows that separately rather than blending the two. Zero-debt companies: a company with no interest expense has, strictly, infinite coverage — the strongest possible position — but Strata currently shows N/A rather than distinguishing "no debt" from "not disclosed". Read a blank here as "check the debt line", not as a warning.