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', GE's interest coverage was -2.18, indicating the firm's ability to meet its interest obligations. Industry average for Consumer Electronics/Appliances in '2021' stood at -1.31.
• In '2022', GE's interest coverage was 2.14, indicating the firm's ability to meet its interest obligations. The increase since '2021' reflects strengthening financial performance. Industry average for Consumer Electronics/Appliances in '2022' stood at -2.93. Industry average declined by 1.62 from previous year.
• In '2023', GE's interest coverage was 11.15, indicating the firm's ability to meet its interest obligations. The increase since '2022' reflects strengthening financial performance. Industry average for Consumer Electronics/Appliances in '2023' stood at -0.95. Industry average increased by 1.98 compared to previous year.
• In '2024', GE's interest coverage was 8.73, indicating the firm's ability to meet its interest obligations. The decline from '2023' may indicate some operational or financial challenges. Industry average for Consumer Electronics/Appliances in '2024' stood at -0.22. Industry average increased by 0.73 compared to previous year.
Overall, GE's interest coverage has been volatile but showed an upward trend over the past 4 years.

Formula: Interest Coverage = EBIT / Interest Expense

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