What is Aethlon Medical's earnings per share (EPS)?

Aethlon Medical (AEMD) reported diluted earnings per share of -$10.61 for fiscal year 2026. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.

Aethlon Medical Financials

AEMD

FY2026 annual

Revenue Not reported for FY2026

Net Income -$7.2M +46.6% YoY

EPS (Diluted) -$10.61 YoY not available

Free Cash Flow -$7.0M +8.4% YoY

Source SEC Filings (10-K/10-Q) Latest period Q1 FY2027, ended Jun 30, 2026 Reported Aug 13, 2026 Currency USD FYE March

This page shows Aethlon Medical (AEMD) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 15 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).

Rhea AI AEMD FY2026 2026-08-15

External financing remains the operating engine as Aethlon’s cash losses closely track net losses and steadily consume its asset base.

In FY2026, operating cash flow of -$7.0M nearly matched net income of -$7.2M, so reported losses are translating directly into cash use rather than reflecting mainly noncash adjustments. Free cash flow of -$7.0M, nearly identical to operating cash flow, indicates capital spending is not the main driver of cash consumption.

Financing dependence is visible in FY2026: financing cash flow of $6.5M covered most of the $7.0M operating cash outflow, and the same pattern appeared in FY2025. The business therefore currently relies on external capital to sustain operations rather than internally generated cash.

Cash of $5.0M exceeded total liabilities of $1.4M in FY2026, giving the company substantial near-term cash coverage despite continuing losses. Yet total assets fell from $7.4M in FY2025 to $6.3M in FY2026, showing that this cushion is shrinking as losses accumulate.

Financial Health Signals

Financial health score not available

Aethlon Medical does not currently provide enough eligible data for a peer-relative financial health score, so none is published. The signals and metrics below are current.

Piotroski F-Score Partial

4/6

Aethlon Medical passes 4 of 6 computable financial strength tests (3 of the nine could not be computed from available data). 2 of 4 profitability signals pass, all 2 leverage/liquidity signals pass.

Earnings Quality No Cash Backing

N/A

Aethlon Medical reported a net loss of $7.2M while operations used $7.0M of cash. With neither figure positive, the ratio between the two carries no quality signal.

Interest Coverage At Risk

N/A

Aethlon Medical reported an operating loss of $7.3M against $14K in interest expense. There is no operating profit to cover interest, so interest must be met from cash reserves or from financing rather than from operations.

Key Financial Metrics

Export CSV

Earnings & Revenue

EBITDA

-$7.0M

YoY+22.6%

Aethlon Medical's EBITDA was -$7.0M in fiscal year 2026, measuring earnings before interest, taxes, depreciation, and amortization. This represents an increase of 22.6% from the prior year.

Net Income

-$7.2M

YoY+46.6%

Aethlon Medical reported -$7.2M in net income in fiscal year 2026. This represents an increase of 46.6% from the prior year.

EPS (Diluted)

-$10.61

Aethlon Medical earned -$10.61 per diluted share (EPS) in fiscal year 2026.

Revenue

Not reported for fiscal year 2026.

Cash & Balance Sheet

Free Cash Flow

-$7.0M

YoY+8.4%

Aethlon Medical recorded an outflow of $7.0M in free cash flow in fiscal year 2026, representing a cash shortfall after capex. This represents an increase of 8.4% from the prior year.

Cash & Debt

$5.0M

YoY-8.6%

5Y CAGR-12.6%

10Y CAGR+9.0%

Aethlon Medical held $5.0M in cash as of fiscal year 2026; long-term debt is not reported for that period.

Shares Outstanding

Aethlon Medical had 2M shares outstanding in fiscal year 2026.

Dividends Per Share

Not reported for fiscal year 2026.

Margins & Returns

Return on Equity

-146.3%

YoY+115.2pp

5Y CAGR-62.7pp

10Y CAGR+167.5pp

Aethlon Medical's ROE was -146.3% in fiscal year 2026, measuring profit generated per dollar of shareholder equity. This is up 115.2 percentage points from the prior year.

Gross Margin

Not reported for fiscal year 2026.

Operating Margin

Not reported for fiscal year 2026.

Net Margin

Not reported for fiscal year 2026.

Capital Allocation

R&D Spending

$1.9M

YoY-13.6%

5Y CAGR-1.6%

10Y CAGR+9.4%

Aethlon Medical invested $1.9M in research and development in fiscal year 2026. This represents a decrease of 13.6% from the prior year.

Capital Expenditures

$4K

5Y CAGR-42.7%

10Y CAGR-8.8%

Aethlon Medical invested $4K in capex in fiscal year 2026, funding long-term assets and infrastructure.

Share Buybacks

Not reported for fiscal year 2026.

AEMD Income Statement

Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type.

AEMD quarterly income statement

Metric	TTM	FY26	FY25	FY24	FY23	FY22	FY21	FY20	FY19	FY18	FY17	FY16	FY15	FY14	FY13	FY12
Revenue	N/A	N/A	N/A	$0-100.0%	$574K+95.2%	$294K-55.4%	$659K+1.4%	$650K+183.2%	$230K+53.5%	$150K-61.8%	$392K-55.8%	$887K+16.3%	$762K-53.0%	$1.6M+32.0%	$1.2M-9.5%	$1.4M
R&D Expenses	N/A	$1.9M-13.6%	$2.2M-12.2%	$2.5M-8.2%	$2.7M+17.3%	$2.3M+13.0%	$2.1M+123.5%	$927K+3.5%	$896K+52.9%	$586K-12.9%	$673K-13.9%	$782K-23.9%	$1.0M-31.9%	$1.5M+4.8%	$1.4M	N/A
SG&A Expenses	N/A	$2.7M-16.9%	$3.2M-16.9%	$3.9M-12.9%	$4.5M+29.7%	$3.5M+40.6%	$2.5M+58.7%	$1.5M+62.4%	$953K+20.3%	$793K-6.7%	$849K-8.6%	$929K+2.4%	$907K-2.6%	$931K+24.8%	$746K-12.5%	$853K
Operating Income	N/A	-$7.3M+21.9%	-$9.3M+26.1%	-$12.6M-6.2%	-$11.9M-14.2%	-$10.4M-32.1%	-$7.9M-33.1%	-$5.9M+1.2%	-$6.0M-24.2%	-$4.8M+20.8%	-$6.1M-39.1%	-$4.4M-9.8%	-$4.0M-30.7%	-$3.1M+14.5%	-$3.6M-14.8%	-$3.1M
Interest Expense	N/A	$14K+42.2%	$10K	N/A	N/A	N/A	$2K-97.1%	$54K-75.4%	$220K-39.0%	$362K+18.8%	$304K+142.2%	$126K-57.8%	$298K-76.8%	$1.3M+213.7%	-$1.1M+70.2%	-$3.8M
Income Tax	N/A	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	N/A
Net Income	N/A	-$7.2M+46.6%	-$13.4M-9.7%	-$12.2M-1.5%	-$12.0M-15.5%	-$10.4M-32.1%	-$7.9M-23.7%	-$6.4M-2.9%	-$6.2M-9.1%	-$5.7M+21.9%	-$7.3M-49.3%	-$4.9M+28.3%	-$6.8M	N/A	-$4.9M	N/A
EPS (Diluted)	—	-$10.61	-$85.77	-$38.87	-$5.86	-$0.71	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Metric	Q1'27	Q4'26	Q3'26	Q2'26	Q1'26	Q4'25	Q3'25	Q2'25
R&D Expenses	$549K	N/A	$533K+81.0%	$294K-43.8%	$524K	N/A	$240K-8.1%	$261K
SG&A Expenses	$662K	N/A	$742K+42.2%	$521K-29.1%	$735K	N/A	$816K-14.8%	$958K
Operating Income	-$1.6M	N/A	-$2.1M-36.6%	-$1.5M+15.8%	-$1.8M	N/A	-$1.8M+37.5%	-$2.9M
Interest Expense	$31K	N/A	$44K+93.0%	$23K-25.6%	$31K	N/A	$60K-37.0%	$95K
Net Income	-$1.5M	N/A	-$2.0M-35.7%	-$1.5M+15.6%	-$1.8M	N/A	-$1.8M+37.5%	-$2.8M
EPS (Diluted)	-$4.02	$0.40	-$2.45	-$3.74	-$42.42-13.4%	-$37.42	-$10.05+37.6%	-$16.11

Not reported in any period shown, so not listed: Revenue, Cost of Revenue, Gross Profit, Income Tax.

AEMD Balance Sheet

Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type.

AEMD quarterly balance sheet

Metric	FY26	FY25	FY24	FY23	FY22	FY21	FY20	FY19	FY18	FY17	FY16	FY15	FY14	FY13	FY12
Total Assets	$6.3M-13.9%	$7.4M-10.8%	$8.2M-52.9%	$17.5M-9.8%	$19.4M+82.0%	$10.7M+2.7%	$10.4M+151.9%	$4.1M-43.9%	$7.4M+325.9%	$1.7M-31.7%	$2.5M+83.2%	$1.4M-18.6%	$1.7M+241.3%	$497K-40.8%	$839K
Current Assets	$5.6M-6.4%	$5.9M-4.4%	$6.2M-58.7%	$15.1M-16.9%	$18.2M+75.4%	$10.4M+3.1%	$10.0M+148.7%	$4.0M-44.1%	$7.2M+352.7%	$1.6M-32.8%	$2.4M+97.3%	$1.2M-18.6%	$1.5M+305.8%	$365K-47.6%	$696K
Cash & Equivalents	$5.0M-8.6%	$5.5M+1.1%	$5.4M-62.6%	$14.5M-14.9%	$17.1M+73.1%	$9.9M+2.7%	$9.6M+150.9%	$3.8M-45.1%	$7.0M+347.1%	$1.6M-26.6%	$2.1M+148.2%	$856K-31.6%	$1.3M+898.0%	$125K-12.9%	$144K
Accounts Receivable	N/A	N/A	N/A	$0-100.0%	$128K-14.2%	$149K-27.9%	$207K	$0-100.0%	$75K	$0-100.0%	$199K+3.2%	$193K+103.1%	$95K-54.4%	$209K-47.8%	$400K
Total Liabilities	$1.4M-35.3%	$2.2M-9.8%	$2.5M+1.4%	$2.4M+0.7%	$2.4M+76.4%	$1.4M+23.9%	$1.1M-39.1%	$1.8M+38.3%	$1.3M+16.6%	$1.1M+10.1%	$1.0M+40.8%	$729K-95.6%	$16.4M+70.4%	$9.6M-4.9%	$10.1M
Current Liabilities	$1.4M-23.8%	$1.9M+3.8%	$1.8M+21.6%	$1.5M-17.5%	$1.8M+32.6%	$1.4M+28.8%	$1.1M-41.5%	$1.8M+281.6%	$478K-21.9%	$612K+16.2%	$527K-8.3%	$574K-96.3%	$15.6M+62.3%	$9.6M-4.9%	$10.1M
Total Equity	$4.9M-4.6%	$5.1M-11.1%	$5.8M-61.7%	$15.1M-11.3%	$17.0M+80.2%	$9.4M+0.2%	$9.4M+288.0%	$2.4M-60.5%	$6.1M+806.9%	$676K-56.4%	$1.6M+152.3%	$615K+104.1%	-$14.9M-63.5%	-$9.1M+1.6%	-$9.3M
Retained Earnings	-$175.1M-4.3%	-$168.0M-8.7%	-$154.6M-8.6%	-$142.4M-9.2%	-$130.3M-8.7%	-$119.9M-7.0%	-$112.0M-6.0%	-$105.7M-6.2%	-$99.5M-6.1%	-$93.8M-8.4%	-$86.5M-6.0%	-$81.6M-9.1%	-$74.8M-21.7%	-$61.5M-8.6%	-$56.6M

Metric	Q1'27	Q4'26	Q3'26	Q2'26	Q1'26	Q4'25	Q3'25	Q2'25
Total Assets	$6.2M-1.5%	$6.3M-21.4%	$8.1M+10.0%	$7.3M+38.0%	$5.3M-27.9%	$7.4M+12.8%	$6.5M-26.2%	$8.8M
Current Assets	$5.6M+0.7%	$5.6M-22.0%	$7.1M+14.2%	$6.3M+54.4%	$4.1M-31.9%	$5.9M+19.8%	$5.0M-30.4%	$7.1M
Cash & Equivalents	$4.9M-1.8%	$5.0M-27.7%	$7.0M+18.8%	$5.9M+55.5%	$3.8M-31.6%	$5.5M+14.0%	$4.8M-29.6%	$6.9M
Total Liabilities	$1.0M-28.4%	$1.4M+7.6%	$1.3M-14.8%	$1.6M-16.2%	$1.9M-15.8%	$2.2M+2.0%	$2.2M-22.5%	$2.8M
Current Liabilities	$1.0M-28.4%	$1.4M+15.1%	$1.3M-10.5%	$1.4M-13.7%	$1.6M-14.3%	$1.9M+7.1%	$1.8M-23.9%	$2.3M
Total Equity	$5.2M+6.4%	$4.9M-27.2%	$6.7M+16.8%	$5.7M+67.8%	$3.4M-33.2%	$5.1M+18.2%	$4.3M-28.0%	$6.0M
Retained Earnings	-$176.7M-0.9%	-$175.1M-1.1%	-$173.2M-1.2%	-$171.2M-0.9%	-$169.7M-1.0%	-$168.0M-3.9%	-$161.7M-1.1%	-$159.9M

Not reported in any period shown, so not listed: Inventory, Accounts Receivable, Goodwill, Long-Term Debt.

AEMD Cash Flow Statement

Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type.

AEMD quarterly cash flow statement

Metric	TTM	FY26	FY25	FY24	FY23	FY22	FY21	FY20	FY19	FY18	FY17	FY16	FY15	FY14	FY13	FY12
Operating Cash Flow	-$7.2M	-$7.0M+8.5%	-$7.6M+24.5%	-$10.1M+3.6%	-$10.5M-7.6%	-$9.8M-44.4%	-$6.8M-30.2%	-$5.2M-21.1%	-$4.3M-9.8%	-$3.9M-11.5%	-$3.5M+19.0%	-$4.3M+14.3%	-$5.0M-136.1%	-$2.1M-1.9%	-$2.1M-14.0%	-$1.8M
Capital Expenditures	N/A	$4K	$0-100.0%	$251K-73.4%	$943K+170.1%	$349K+483.1%	$60K-60.5%	$152K	$0-100.0%	$25K+51.1%	$16K+76.6%	$9K	$0-100.0%	$96K	$0-100.0%	$2K
Free Cash Flow	N/A	-$7.0M+8.4%	-$7.6M+26.3%	-$10.4M+9.3%	-$11.4M-13.2%	-$10.1M-48.2%	-$6.8M-27.6%	-$5.3M-24.6%	-$4.3M-9.1%	-$3.9M-11.7%	-$3.5M+18.8%	-$4.3M+14.1%	-$5.0M-125.9%	-$2.2M-6.5%	-$2.1M-13.9%	-$1.8M
Investing Cash Flow	N/A	-$4K	$0+100.0%	-$251K+73.4%	-$943K-170.1%	-$349K-483.1%	-$60K+60.5%	-$152K	$0+100.0%	-$25K-51.1%	-$16K-76.6%	-$9K	$0+100.0%	-$96K	$0+100.0%	-$2K
Financing Cash Flow	$8.3M	$6.5M-15.6%	$7.7M+500.1%	$1.3M-85.6%	$8.9M-48.7%	$17.4M+143.6%	$7.1M-35.9%	$11.1M+869.6%	$1.1M-87.7%	$9.3M+216.1%	$3.0M-47.2%	$5.6M+20.5%	$4.7M+38.5%	$3.4M+61.5%	$2.1M+5.5%	$2.0M
Share Buybacks	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	$194K-30.4%	$279K-26.4%	$379K	$0	N/A	N/A	N/A	N/A

Metric	Q1'27	Q4'26	Q3'26	Q2'26	Q1'26	Q4'25	Q3'25	Q2'25
Operating Cash Flow	-$1.9M-8.4%	-$1.8M+6.6%	-$1.9M-13.0%	-$1.7M+3.3%	-$1.7M-2.5%	-$1.7M+16.8%	-$2.0M+9.2%	-$2.2M
Capital Expenditures	$9K+346.1%	$2K	N/A	N/A	$0-100.0%	-$2K0.0%	$2K	$0
Free Cash Flow	-$1.9M-8.7%	-$1.8M	N/A	N/A	-$1.7M-2.4%	-$1.7M+16.8%	-$2.0M+9.1%	-$2.2M
Investing Cash Flow	-$9K-346.1%	-$2K	N/A	N/A	$0-100.0%	$2K+200.0%	-$2K	$0
Financing Cash Flow	$1.8M+1024.8%	-$196K-106.6%	$3.0M-20.3%	$3.7M+69936.1%	-$5K-100.2%	$2.4M+33453.0%	-$7K-84.6%	-$4K

Not reported in any period shown, so not listed: Dividends Paid, Share Buybacks.

AEMD Financial Ratios

Margins and returns are percentages; the remaining ratios are unitless multiples.

AEMD quarterly financial ratios

Metric	FY26	FY25	FY24	FY23	FY22	FY21	FY20	FY19	FY18	FY17	FY16	FY15	FY14	FY13	FY12
Operating Margin	N/A	N/A	N/A	-2072.1%	-3542.5%	-1197.3%	-912.0%	-2612.5%	-3228.8%	-1555.4%	-494.6%	-523.7%	-188.2%	-290.7%	-229.1%
Net Margin	N/A	N/A	N/A	-2094.9%	-3540.9%	-1196.6%	-980.3%	-2697.8%	-3795.9%	-1855.8%	-549.6%	-891.5%	N/A	-397.7%	N/A
Return on Equity	-146.3%+115.2pp	-261.5%-49.8pp	-211.8%-131.9pp	-79.9%-18.6pp	-61.3%+22.3pp	-83.6%-15.9pp	-67.7%+187.7pp	-255.4%-162.8pp	-92.6%+983.1pp	-1075.7%-762.0pp	-313.8%+790.6pp	-1104.4%	N/A	N/A	N/A
Return on Assets	-112.9%+69.2pp	-182.1%-34.0pp	-148.1%-79.4pp	-68.7%-15.1pp	-53.6%+20.3pp	-73.9%-12.6pp	-61.4%+88.9pp	-150.3%-73.0pp	-77.3%+344.2pp	-421.5%-228.8pp	-192.7%+299.7pp	-492.3%	N/A	-984.9%	N/A
Current Ratio	3.85+0.7x	3.13-0.3x	3.40-6.6x	10.03+0.1x	9.95+2.4x	7.53-1.9x	9.40+7.2x	2.21-12.9x	15.13+12.5x	2.61-1.9x	4.51+2.4x	2.10+2.0x	0.09+0.1x	0.040.0x	0.07
Debt-to-Equity	0.30-0.1x	0.440.0x	0.43+0.3x	0.160.0x	0.140.0x	0.150.0x	0.12-0.6x	0.75+0.5x	0.21-1.5x	1.67+1.0x	0.66-0.5x	1.18	N/A	N/A	N/A
FCF Margin	N/A	N/A	N/A	-1993.6%	-3439.0%	-1035.5%	-822.7%	-1869.8%	-2630.2%	-898.4%	-489.4%	-662.3%	-137.6%	-170.6%	-135.6%

Metric	Q1'27	Q4'26	Q3'26	Q2'26	Q1'26	Q4'25	Q3'25	Q2'25
Return on Equity	-29.8%	N/A	-30.1%-4.2pp	-25.9%+25.6pp	-51.5%	N/A	-40.5%+6.1pp	-46.6%
Return on Assets	-24.8%	N/A	-25.1%-4.7pp	-20.3%+12.9pp	-33.2%	N/A	-26.9%+4.8pp	-31.7%
Current Ratio	5.42+1.6x	3.85-1.8x	5.68+1.2x	4.45+2.0x	2.49-0.6x	3.13+0.3x	2.80-0.3x	3.06
Debt-to-Equity	0.20-0.1x	0.30+0.1x	0.20-0.1x	0.27-0.3x	0.55+0.1x	0.44-0.1x	0.510.0x	0.47

Not reported in any period shown, so not listed: Gross Margin, Operating Margin, Net Margin, FCF Margin.

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Where Aethlon Medical Ranks

Frequently Asked Questions

Is Aethlon Medical profitable?

No, Aethlon Medical (AEMD) reported a net income of -$7.2M in fiscal year 2026.

What is Aethlon Medical's EBITDA?

Aethlon Medical (AEMD) had EBITDA of -$7.0M in fiscal year 2026, measuring earnings before interest, taxes, depreciation, and amortization.

What is Aethlon Medical's return on equity (ROE)?

Aethlon Medical (AEMD) has a return on equity of -146.3% for fiscal year 2026, measuring how efficiently the company generates profit from shareholder equity.

What is Aethlon Medical's free cash flow?

Aethlon Medical (AEMD) recorded an outflow of $7.0M in free cash flow during fiscal year 2026. This represents a 8.4% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.

What is Aethlon Medical's operating cash flow?

Aethlon Medical (AEMD) recorded an outflow of $7.0M in operating cash flow during fiscal year 2026, representing cash used by core business activities.

What are Aethlon Medical's total assets?

Aethlon Medical (AEMD) had $6.3M in total assets as of fiscal year 2026, including both current and long-term assets.

What are Aethlon Medical's capital expenditures?

Aethlon Medical (AEMD) invested $4K in capital expenditures during fiscal year 2026, funding long-term assets and infrastructure.

How much does Aethlon Medical spend on research and development?

Aethlon Medical (AEMD) invested $1.9M in research and development during fiscal year 2026.

How many shares does Aethlon Medical have outstanding?

Aethlon Medical (AEMD) had 2M shares outstanding as of fiscal year 2026.

What is Aethlon Medical's current ratio?

Aethlon Medical (AEMD) had a current ratio of 3.85 as of fiscal year 2026, which is generally considered healthy.

What is Aethlon Medical's debt-to-equity ratio?

Aethlon Medical (AEMD) had a debt-to-equity ratio of 0.30 as of fiscal year 2026, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is Aethlon Medical's return on assets (ROA)?

Aethlon Medical (AEMD) had a return on assets of -112.9% for fiscal year 2026, measuring how efficiently the company uses its assets to generate profit.

How does Aethlon Medical's liquidity compare with its operating cash outflow?

At the end of fiscal year 2026, Aethlon Medical (AEMD) held $5.0M in cash, cash equivalents and investments, and reported an operating cash outflow of $7.0M over that year. Dividing the one by the other, the reported balance equals about 9 months of the outflow reported that year. This is arithmetic over figures already filed, not a projection: it assumes nothing about future spending, financing or operations.

What is Aethlon Medical's Piotroski F-Score?

Aethlon Medical (AEMD) has a Piotroski F-Score of 4 out of 6 computable signals; 3 of the nine could not be computed from available data, so the full-scale strength rating is not shown. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7 to 9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.

Are Aethlon Medical's earnings high quality?

Aethlon Medical (AEMD) reported a net loss of $7.2M while operations used $7.0M of cash. With neither figure positive, the ratio between the two carries no quality signal. This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.

Can Aethlon Medical cover its interest payments?

Aethlon Medical (AEMD) reported an operating loss of $7.3M against $14K in interest expense. There is no operating profit to cover interest, so interest must be met from cash reserves or from financing rather than from operations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.