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.

Capital One Financial COF Interest coverage

Interest coverage at other companies

American ExpressAXP

2.7×+0.1×

JPMorgan ChaseJPM

1.8×0.0×

Bank of AmericaBAC

1.5×+0.1×

Wells Fargo & CompanyWFC

1.6×+0.1×

CitigroupC

1.3×+0.1×

Synchrony FinancialSYF

2.2×+0.3×

Other financials

Income statement

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Revenue$15.2B+52.3%

Net income$2.2B+54.8%

EPS (diluted)$3.34-3.2%

Balance sheet

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Cash & equivalents$79.3B+61.9%

Total debt$53.5B+26.4%

Total equity$112.26B+76.7%

Total assets$682.91B+38.4%

Cash flow

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Operating cash flow$6.0B+29.1%

CapEx$553.0M+58.9%

Free cash flow$5.5B+26.7%

Valuation

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Market cap$125.41B+65.2%

Enterprise value$99.67B+41.4%

P/E38.9×+23.3×

P/S2.1×+0.2×

Profitability

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Net margin5.5%-6.8pp

Returns & leverage

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Return on equity3.7%-4.4pp

Debt / equity0.5×-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.