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.

Citizens Financial Group CFG Interest coverage

Interest coverage at other companies

First Citizens BancSharesFCNCA

1.6×0.0×

JPMorgan ChaseJPM

1.8×0.0×

M&T BankMTB

2.1×+0.2×

Bank of AmericaBAC

1.5×+0.1×

PNC Financial ServicesPNC

1.8×+0.2×

Huntington BancsharesHBAN

1.6×0.0×

Other financials

Income statement

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Revenue$2.2B+12.0%

Net income$517.0M+38.6%

EPS (diluted)$1.13+46.8%

Balance sheet

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Cash & equivalents$12.3B+6.8%

Total debt$12.3B—

Total equity$26.2B+5.3%

Total assets$227.92B+3.5%

Cash flow

See full

Operating cash flow$237.0M+211%

CapEx--100%

Free cash flow$237.0M+204%

Valuation

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Market cap$28.24B+42.3%

Enterprise value$28.22B+36.3%

P/E14.3×+1.5×

P/S3.3×+0.8×

Profitability

See full

Net margin23.3%+3.4pp

Returns & leverage

See full

Return on equity7.7%+1.4pp

Debt / equity0.5×0.0×

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.