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 '2022', BBWI's interest coverage was 4.67, indicating the firm's ability to meet its interest obligations. Industry average for Clothing/Shoe/Accessory Stores in '2022' stood at 4.26.
• In '2023', BBWI's interest coverage was 4.00, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Clothing/Shoe/Accessory Stores in '2023' stood at 1.88. Industry average declined by 2.38 from previous year.
• In '2024', BBWI's interest coverage was 3.96, indicating the firm's ability to meet its interest obligations. The decline from '2023' may indicate some operational or financial challenges. Industry average for Clothing/Shoe/Accessory Stores in '2024' stood at 1.65. Industry average declined by 0.23 from previous year.
• In '2025', BBWI's interest coverage was 4.29, indicating the firm's ability to meet its interest obligations. The increase since '2024' reflects strengthening financial performance. Industry average for Clothing/Shoe/Accessory Stores in '2025' stood at 1.08. Industry average declined by 0.58 from previous year.
Overall, BBWI'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.