Name: Interest Coverage

Definition: Interest coverage tells you how easily the company can pay interest on its debt using operating profits. It’s like asking: “Can the company comfortably make its loan payments, or is it barely scraping by?” The higher the ratio, the safer. A very low ratio means debt payments may strain the business, especially if profits drop.

Interpretation:
• In '2021', AXTA's interest coverage was 3.54, indicating the firm's ability to meet its interest obligations. Industry average for Paints/Coatings in '2021' stood at 6.18.
• In '2022', AXTA's interest coverage was 2.84, indicating the firm's ability to meet its interest obligations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Paints/Coatings in '2022' stood at 6.62. Industry average increased by 0.43 compared to previous year.
• In '2023', AXTA's interest coverage was 2.67, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Paints/Coatings in '2023' stood at 5.66. Industry average declined by 0.96 from previous year.
• In '2024', AXTA's interest coverage was 3.42, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Paints/Coatings in '2024' stood at 6.59. Industry average increased by 0.94 compared to previous year.
Overall, AXTA's interest coverage has consistently declined during the past 4 years.

Formula: Interest Coverage = EBIT / Interest Expense

Good Range: Minimum 3-5 desirable; below 1 is risky.