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', KSS's interest coverage was 5.69, 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', KSS's interest coverage was 0.81, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Department/Specialty Retail Stores in '2023' stood at 5.90. Industry average declined by 1.76 from previous year.
• In '2024', KSS's interest coverage was 2.08, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Department/Specialty Retail Stores in '2024' stood at 5.39. Industry average declined by 0.50 from previous year.
• In '2025', KSS's interest coverage was 1.36, 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, KSS's interest coverage has been volatile but showed a downward trend over the past 4 years.

Formula: Interest Coverage = EBIT / Interest Expense

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