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', DDS's interest coverage was 25.22, indicating the firm's ability to meet its interest obligations. Industry average for Department/Specialty Retail Stores in '2022' stood at 7.66.
• In '2023', DDS's interest coverage was 26.59, indicating the firm's ability to meet its interest obligations. The increase since '2022' reflects strengthening financial performance. Industry average for Department/Specialty Retail Stores in '2023' stood at 5.90. Industry average declined by 1.76 from previous year.
• In '2024', DDS's interest coverage was 23.55, indicating the firm's ability to meet its interest obligations. The decline from '2023' may indicate some operational or financial challenges. Industry average for Department/Specialty Retail Stores in '2024' stood at 5.39. Industry average declined by 0.50 from previous year.
• In '2025', DDS's interest coverage was 19.30, indicating the firm's ability to meet its interest obligations. The decline from '2024' may indicate some operational or financial challenges. Industry average for Department/Specialty Retail Stores in '2025' stood at 5.08. Industry average declined by 0.31 from previous year.
Overall, DDS'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.