What is interest coverage?
Interest coverage shows how many times a company's operating profit covers the interest on its debt. It divides profit before interest and income tax by interest expense, the cost of borrowed money.[S1][S2] The answer is a number of times, such as "4 times".
How is interest coverage worked out?
Interest coverage = operating income ÷ interest expense. Operating income is profit before interest and income tax, often called income from operations.[S1]
The SEC notes the ratio is often calculated as earnings before interest and taxes divided by interest payments.[S2] Each Cityfort stock page's notes give the inputs and the period used.
Cisco's page shows operating income of $15.4B (FY2026) and interest coverage of 10.5 times (Jul 25, 2026). Its debt notes give the interest expense behind it.
Where do you find it in a 10-K or 10-Q?
No line is called interest coverage. Both inputs sit on the income statement: 10-K Item 8, or 10-Q Part I, Item 1.[S5][S6]
SEC rules list "interest and amortization of debt discount and expense" as an income statement line.[S3] An amount that is not material need not be shown on its own.[S4] Apple's stock page explains why it shows no interest coverage.
What does interest coverage leave out?
- Debt repayments. It compares profit with interest only, not with loans falling due.[S2]
- Operating leases. Their cost is recorded as lease expense, with no separate interest.[S2]
- Interest earned. Some income statements combine interest income with interest expense, which changes the figure.[S1]
Non-GAAP measures explains why a ratio built on a company's adjusted profit is a different number.