The interest coverage ratio (defined as annual operating profit divided by annual interest payments). Your company's interest coverage ratio is used by credit analysts to measure the "safety margin" that creditors have in assuring that company profits from operations are high enough to cover annual interest payments. An interest coverage ratio of 2.0 is considered "minimal" by credit analysts--a prior-year interest coverage ratio below 2.0 precludes any use of 5-year or 10-year loans in the current (or upcoming) year. A coverage ratio of 5.0 to 10.0 is considered much more satisfactory for companies in the footwear industry because of (1) the chances for big swings in earnings from one year to the next, (2) the risks of intense competitive pressures which can produce sudden downturns in a company's profitability, and (3) the relatively unproven management expertise at each company. It usually takes a interest coverage ratio of 5.0 or higher to secure an A- or higher credit rating, since this credit measure is strongly weighted in determining a company's credit rating. The interest coverage ratio (defined as annual operating profit divided by annual interest payments). Your company's interest coverage ratio is used by credit analysts to measure the "safety margin" that creditors have in assuring that company profits from operations are high enough to cover annual interest payments. An interest coverage ratio of 2.0 is considered "minimal" by credit analysts--a prior-year interest coverage ratio below 2.0 precludes any use of 5-year or 10-year loans in the current (or upcoming) year. A coverage ratio of 5.0 to 10.0 is considered much more satisfactory for companies in the footwear industry because of (1) the chances for big swings in earnings from one year to the next, (2) the risks of intense competitive pressures which can produce sudden downturns in a company's profitability, and (3) the relatively unproven management expertise at each company. It usually takes a interest coverage ratio of 5.0 or higher to secure an A- or higher credit rating, since this credit measure is strongly weighted in determining a company's credit rating