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', SONO's interest coverage was 266.08, indicating the firm's ability to meet its interest obligations. Industry average for Consumer Electronics/Appliances in '2021' stood at -1.31.
• In '2022', SONO's interest coverage was 125.51, indicating the firm's ability to meet its interest obligations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Consumer Electronics/Appliances in '2022' stood at -2.93. Industry average declined by 1.62 from previous year.
• In '2023', SONO's interest coverage was 6.99, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Consumer Electronics/Appliances in '2023' stood at -0.95. Industry average increased by 1.98 compared to previous year.
• In '2024', SONO's interest coverage was -60.57, 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, SONO'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.