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.

Charles Schwab Corporation SCHW Interest coverage

Interest coverage at other companies

JPMorgan ChaseJPM

1.8×0.0×

Morgan StanleyMS

1.5×+0.1×

Interactive Brokers Group, Inc.IBKR

2.2×+0.2×

LPL Financial HoldingsLPLA

3.9×-2.2×

State StreetSTT

1.5×+0.1×

Northern TrustNTRS

1.4×0.0×

Other financials

Income statement

See full

Revenue$6.5B+15.8%

Net income$2.5B+29.9%

EPS (diluted)$1.37+38.4%

Balance sheet

See full

Cash & equivalents$73.3B+18.2%

Total debt$20.5B-30.2%

Total equity$49.2B-0.6%

Total assets$493.32B+6.6%

Cash flow

See full

Operating cash flow$7.3B+15.5%

CapEx$140.0M+19.7%

Free cash flow$7.2B+15.4%

Valuation

See full

Market cap$159.48B+16.0%

Enterprise value$106.71B+2.3%

P/E16.9×-4.3×

P/S6.4×-0.3×

Profitability

See full

Net margin38%+6.3pp

Returns & leverage

See full

Return on equity19.1%+5.0pp

Debt / equity0.4×-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.