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', BTM's interest coverage was 1.72, indicating the firm's ability to meet its interest obligations. Industry average for Finance: Consumer Services in '2021' stood at 1.40.
• In '2022', BTM's interest coverage was 1.32, indicating the firm's ability to meet its interest obligations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Finance: Consumer Services in '2022' stood at 1.73. Industry average increased by 0.33 compared to previous year.
• In '2023', BTM's interest coverage was 1.13, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Finance: Consumer Services in '2023' stood at -0.14. Industry average declined by 1.87 from previous year.
• In '2024', BTM's interest coverage was 1.70, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Finance: Consumer Services in '2024' stood at 0.76. Industry average increased by 0.90 compared to previous year.
Overall, BTM's interest coverage has been volatile but generally stable over the past 4 years.

Formula: Interest Coverage = EBIT / Interest Expense

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