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.

Elevance Health ELV Interest coverage

Interest coverage at other companies

HumanaHUM

4.8×-5.0×

CVS HealthCVS

1.9×-1.3×

UnitedHealth GroupUNH

4.8×-3.5×

CenteneCNC

-10.9×-16.0×

Cardinal HealthCAH

6.7×-8.2×

GE HealthCare TechnologiesGEHC

5.9×+0.7×

Other financials

Income statement

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Revenue$50.2B+2.6%

Gross profit$44.7B+1.8%

Net income$1.8B-19.2%

EPS (diluted)$8.00-16.8%

Balance sheet

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Cash & equivalents$9.7B+28.8%

Total debt$31.5B+11.0%

Total equity$43.9B+3.3%

Total assets$125.83B+5.1%

Cash flow

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Operating cash flow$4.3B+326%

CapEx$235.0M+19.9%

Free cash flow$4.1B+399%

Valuation

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Market cap$84.97B-34.7%

Enterprise value$106.8B-27.8%

P/E16.2×-5.8×

P/S0.4×-0.3×

Profitability

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Gross margin89.2%+0.6pp

Net margin2.6%-0.6pp

Returns & leverage

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Return on equity12.1%-2.1pp

Debt / equity0.7×+0.1×

Current ratio1.5×0.0×

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.