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', ZDAI's interest coverage was 6.22, indicating the firm's ability to meet its interest obligations. Industry average for General Bldg Contractors - Nonresidential Bldgs in '2021' stood at 4.79.
• In '2022', ZDAI's interest coverage was 21.27, indicating the firm's ability to meet its interest obligations. The increase since '2021' reflects strengthening financial performance. Industry average for General Bldg Contractors - Nonresidential Bldgs in '2022' stood at -2.93. Industry average declined by 7.73 from previous year.
• In '2023', ZDAI's interest coverage was 8.28, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for General Bldg Contractors - Nonresidential Bldgs in '2023' stood at 3.54. Industry average increased by 6.48 compared to previous year.
• In '2024', ZDAI's interest coverage was 7.35, indicating the firm's ability to meet its interest obligations. The decline from '2023' may indicate some operational or financial challenges. Industry average for General Bldg Contractors - Nonresidential Bldgs in '2024' stood at 3.15. Industry average declined by 0.39 from previous year.
Overall, ZDAI'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.