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', VFS's interest coverage was -8.30, indicating the firm's ability to meet its interest obligations. Industry average for Blank Checks in '2021' stood at -0.91.
• In '2022', VFS's interest coverage was -6.95, indicating the firm's ability to meet its interest obligations. The increase since '2021' reflects strengthening financial performance. Industry average for Blank Checks in '2022' stood at -2.25. Industry average declined by 1.35 from previous year.
• In '2023', VFS's interest coverage was -4.94, indicating the firm's ability to meet its interest obligations. The increase since '2022' reflects strengthening financial performance. Industry average for Blank Checks in '2023' stood at -1.79. Industry average increased by 0.46 compared to previous year.
• In '2024', VFS's interest coverage was -3.94, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Blank Checks in '2024' stood at -3.62. Industry average declined by 1.83 from previous year.
Overall, VFS'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.