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', NESR's interest coverage was -2.99, indicating the firm's ability to meet its interest obligations. Industry average for Oilfield Services/Equipment in '2021' stood at 0.35.
• In '2022', NESR's interest coverage was 0.13, indicating the firm's ability to meet its interest obligations. The increase since '2021' reflects strengthening financial performance. Industry average for Oilfield Services/Equipment in '2022' stood at 2.74. Industry average increased by 2.39 compared to previous year.
• In '2023', NESR's interest coverage was 1.65, indicating the firm's ability to meet its interest obligations. The increase since '2022' reflects strengthening financial performance. Industry average for Oilfield Services/Equipment in '2023' stood at 3.00. Industry average increased by 0.27 compared to previous year.
• In '2024', NESR's interest coverage was 3.39, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Oilfield Services/Equipment in '2024' stood at 3.12. Industry average increased by 0.12 compared to previous year.
Overall, NESR'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.