What does interest coverage mean?

How many times the company's operating profit covers its interest bill.

How do you interpret interest coverage?

Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.

How does interest coverage compare across companies?

Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.

Citigroup C Interest coverage

Interest coverage at other companies

JPMorgan ChaseJPM

1.8×0.0×

Bank of AmericaBAC

1.5×+0.1×

Wells Fargo & CompanyWFC

1.6×+0.1×

Goldman Sachs GroupGS

1.3×+0.1×

Morgan StanleyMS

1.5×+0.1×

Capital One FinancialCOF

1.2×-0.2×

Other financials

Income statement

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Revenue$24.6B+14.1%

Net income$5.8B+42.3%

EPS (diluted)$3.06+56.1%

Balance sheet

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Cash & equivalents$385.72B+25.1%

Total debt$396.86B+12.5%

Total equity$210.96B-0.7%

Total assets$2.78T+8.0%

Cash flow

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Operating cash flow-$21.9B+62.7%

CapEx$1.4B-6.7%

Free cash flow-$23.3B+61.3%

Valuation

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Market cap$244B+48.5%

Enterprise value$255.14B+17.7%

P/E15.2×+2.9×

P/S2.8×+0.7×

Profitability

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Gross margin76.6%—

Net margin18.2%+1.7pp

FCF margin-71.1%—

Returns & leverage

See full

Return on equity7.6%+1.2pp

Debt / equity1.9×+0.2×

Questions, answered.

What does interest coverage mean?: How many times the company's operating profit covers its interest bill.
How do you interpret interest coverage?: Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.
How does interest coverage compare across companies?: Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.