A drawback to using an interest coverage ratio is that the operating profit of a firm can vary greatly from one year to the next. The interest coverage ratio therefore moves around a lot. In some years, it may even be negative. This can render the coverage ratio meaningless. The interest coverage ratio also does not take required principal repayments into account. Finally, it does not reflect the firm’s nonfinancial liabilities. This is why the interest coverage ratio—like other ratios—should not be used as an exclusive measure.