Compute the interest coverage ratio for a company with EBIT of $160,000 and interest expense of $30,000. Discuss what this ratio indicates about the company’s ability to meet its interest obligations and its overall financial stability. Analyze the potential factors that could affect the interest coverage ratio, such as changes in operating income, interest rates, and debt levels. Consider the implications of a high or low interest coverage ratio for the company’s financial health and risk profile. Discuss the strategic importance of maintaining a healthy interest coverage ratio, including managing debt levels, optimizing capital structure, and ensuring sustainable earnings. Explain how the interest coverage ratio can be used in financial planning, risk management, and investment decision-making. Discuss the role of interest coverage in credit analysis and its significance for lenders and investors.