What is Texas Mineral Res Corp's earnings per share (EPS)?

Texas Mineral Res Corp (TMRC) reported diluted earnings per share of -$0.03 for fiscal year 2025. This represents a -200.0% change compared to the previous fiscal year. 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.

Texas Mineral Res Corp (TMRC) Financials

TMRC

FY2025 annual

Revenue Not reported for FY2025

Net Income -$1.9M -132.1% YoY

EPS (Diluted) -$0.03 -200.0% YoY

Operating Cash Flow -$897K -35.5% YoY

Source SEC Filings (10-K/10-Q) Latest period Q3 FY2026, ended May 31, 2026 Reported Jun 30, 2026 Currency USD FYE August

Newest figures come from the 10-Q for Q3 FY2026, filed Jun 30, 2026. Each column of the statement tables below links to the filing it was taken from, and every filing is listed on the TMRC SEC filings page.

This page shows Texas Mineral Res Corp (TMRC) 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 TMRC FY2025 2026-08-29

Pre-revenue economics leave Texas Mineral Resources dependent on external funding while recurring losses and interest costs absorb capital.

From FY2024 to FY2025, operating cash flow moved from -$662K to -$897K even as the operating loss worsened; that pairing signals deteriorating cash conversion, not merely an accounting loss.

FY2025 net loss was $1.9M against an operating loss of $1.2M. With interest expense at $746K, financing costs materially amplified the operating deficit rather than the result being explained solely by operating overhead.

Liabilities rose from $43K in FY2024 to $125K in FY2025. The current ratio fell from 11.5x to 5.0x, indicating a narrower short-term cushion despite low absolute liabilities. The reported liquidity comparison equaled 7.9 months of FY2025 operating outflow, while financing cash flow was $1.1M; together, these figures describe funding-dependent operations, not internally funded operations.

Financial Health Signals

Financial health score not available

Texas Mineral Res Corp 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

1/6

Texas Mineral Res Corp passes 1 of 6 computable financial strength tests (3 of the nine could not be computed from available data). 1 of 4 profitability signals pass, no leverage/liquidity signals pass (rising debt, declining liquidity, or share dilution).

Earnings Quality No Cash Backing

N/A

Texas Mineral Res Corp reported a net loss of $1.9M while operations used $897K of cash. With neither figure positive, the ratio between the two carries no quality signal.

Interest Coverage At Risk

N/A

Texas Mineral Res Corp reported an operating loss of $1.2M against $746K 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

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Earnings & Revenue

Net Income

-$1.3M

YoY-63.6%

QoQ-64.1%

Texas Mineral Res Corp reported -$1.3M in net income in Q3 2026. This represents a decrease of 63.6% from the same quarter a year earlier. Against the prior quarter it is down 64.1%.

EPS (Diluted)

-$0.01

Texas Mineral Res Corp earned -$0.01 per diluted share (EPS) in Q3 2026.

Revenue

Not reported for Q3 2026.

EBITDA

Not reported for Q3 2026.

Cash & Balance Sheet

Cash & Debt

$2.6M

YoY+234.2%

QoQ+230.1%

5Y CAGR-11.9%

10Y CAGR+70.5%

Texas Mineral Res Corp held $2.6M in cash as of Q3 2026; long-term debt is not reported for that period.

Shares Outstanding

88M

5Y CAGR+4.2%

Texas Mineral Res Corp had 88M shares outstanding in Q3 2026.

Free Cash Flow

Not reported for Q3 2026.

Dividends Per Share

Not reported for Q3 2026.

Margins & Returns

Return on Equity

-44.5%

YoY+110.3pp

QoQ-25.7pp

Texas Mineral Res Corp's ROE was -44.5% in Q3 2026, measuring profit generated per dollar of shareholder equity. This is up 110.3 percentage points from the same quarter a year earlier. Against the prior quarter it is down 25.7 percentage points.

Gross Margin

Not reported for Q3 2026.

Operating Margin

Not reported for Q3 2026.

Net Margin

Not reported for Q3 2026.

Capital Allocation

None of these metrics is reported for Q3 2026.

TMRC Income Statement

Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.

TMRC quarterly income statement

Metric	TTM	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
SG&A Expenses	N/A	$872K-0.6%	$877K-51.9%	$1.8M+32.4%	$1.4M+2.5%	$1.3M+27.2%	$1.1M+22.0%	$866K+67.1%	$518K+4.5%	$496K-49.8%	$988K-31.9%	$1.5M-37.8%	$2.3M-2.9%	$2.4M-64.4%	$6.8M+17.4%	$5.8M
Operating Income	N/A	-$1.2M-26.7%	-$954K+63.4%	-$2.6M+10.6%	-$2.9M-86.3%	-$1.6M-45.5%	-$1.1M-6.9%	-$1.0M-62.6%	-$618K	N/A	-$1.2M+39.0%	-$2.0M+29.3%	-$2.8M+24.3%	-$3.7M+74.4%	-$14.4M-104.2%	-$7.0M
EBITDA	N/A	N/A	N/A	-$2.6M+10.4%	-$2.9M-86.3%	-$1.6M-45.1%	-$1.1M-6.9%	-$1.0M-64.1%	-$612K+68.9%	-$2.0M-67.6%	-$1.2M+39.3%	-$1.9M+28.9%	-$2.7M+24.3%	-$3.6M+74.8%	-$14.3M-103.6%	-$7.0M
Interest Expense	N/A	$746K	N/A	$34K+365.7%	$7K+20.8%	$6K-13.2%	$7K-66.6%	$21K-82.6%	$121K	N/A	N/A	N/A	N/A	$16K+4747.6%	$334+126.4%	-$1K
Income Tax	N/A	N/A	N/A	N/A	N/A	N/A	$0	$0	$0	$0	N/A	N/A	N/A	N/A	N/A	N/A
Net Income	N/A	-$1.9M-132.1%	-$833K+67.9%	-$2.6M+10.7%	-$2.9M-242.0%	$2.0M+279.2%	-$1.1M+52.1%	-$2.4M-222.5%	-$738K	N/A	-$1.2M+38.8%	-$2.0M+28.9%	-$2.8M+24.3%	-$3.7M+74.3%	-$14.4M-104.8%	-$7.0M
EPS (Basic)	N/A	-$0.03-200.0%	-$0.01+75.0%	-$0.040.0%	-$0.04-233.3%	$0.03+250.0%	-$0.02	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
EPS (Diluted)	-$0.03	-$0.03-200.0%	-$0.01+75.0%	-$0.040.0%	-$0.04-233.3%	$0.03+250.0%	-$0.02	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Diluted Shares (Avg)	N/A	75M+1.4%	74M+1.0%	73M+1.1%	72M-0.6%	73M+19.1%	61M	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Metric	Q3'2610-Q	Q2'2610-Q	Q1'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K
SG&A Expenses	$1.3M+437.5%	$296K+47.7%	$247K+16.8%	N/A	$250K+17.9%	$200K-12.2%	$211K-9.4%	N/A
Operating Income	-$1.3M-167.0%	-$311K-52.0%	-$251K-8.1%	N/A	-$506K-92.6%	-$204K+13.4%	-$233K+0.1%	N/A
Interest Expense	N/A	N/A	N/A	N/A	$307K	$39K	N/A	N/A
Net Income	-$1.3M-63.6%	-$801K-231.2%	-$246K-7.3%	N/A	-$804K-215.9%	-$242K-71.3%	-$229K-3.5%	N/A
EPS (Basic)	-$0.010.0%	-$0.01	$0.00	-$0.01	-$0.01	$0.00	$0.00	$0.00+100.0%
EPS (Diluted)	-$0.01	-$0.01	$0.00	-$0.01	-$0.01	$0.00	$0.00	$0.00+100.0%
Diluted Shares (Avg)	88M	82M+9.4%	80M+7.5%	N/A	75M+1.4%	75M+1.3%	74M+0.9%	N/A

Not reported in any period shown, so not listed: Revenue, Cost of Revenue, Gross Profit, R&D Expenses, EBITDA, Income Tax.

TMRC Balance Sheet

TMRC quarterly balance sheet

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Total Assets	$1.2M+28.1%	$906K-40.9%	$1.5M-50.2%	$3.1M-42.9%	$5.4M+64.2%	$3.3M+50.8%	$2.2M+455.3%	$393K-0.7%	$396K-78.1%	$1.8M-1.9%	$1.8M-19.6%	$2.3M-48.0%	$4.4M-39.5%	$7.3M-57.9%	$17.3M
Current Assets	$632K+28.7%	$491K-56.1%	$1.1M-57.6%	$2.6M-49.1%	$5.2M+76.8%	$2.9M+60.2%	$1.8M+5137.1%	$35K+350.8%	$8K-34.5%	$12K-61.0%	$30K-93.0%	$432K-82.2%	$2.4M-63.0%	$6.6M-61.0%	$16.9M
Cash & Equivalents	$590K+37.9%	$428K-60.3%	$1.1M-41.3%	$1.8M-64.0%	$5.1M+85.9%	$2.7M+50.5%	$1.8M+5675.5%	$32K+2825.1%	$1K-79.1%	$5K+75.8%	$3K-99.2%	$388K-83.7%	$2.4M-63.6%	$6.5M-61.4%	$16.9M
Short-Term Investments	$0	$0	$0-100.0%	$506K	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
Long-Term Investments	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
Total Liabilities	$125K+193.9%	$43K-54.3%	$93K+127.3%	$41K-79.6%	$201K-81.6%	$1.1M-23.6%	$1.4M-29.8%	$2.0M+35.0%	$1.5M+60.7%	$939K+54.2%	$609K+34.1%	$454K-17.2%	$549K+14.7%	$478K-17.5%	$580K
Current Liabilities	$125K+193.9%	$43K-54.3%	$93K+127.3%	$41K-79.6%	$201K-81.6%	$1.1M-23.6%	$1.4M-29.8%	$2.0M+35.0%	$1.5M+60.7%	$939K+54.2%	$609K+214.0%	$194K-24.8%	$258K-46.1%	$478K-17.5%	$580K
Non-Current Liabilities	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0-100.0%	$260K-10.5%	$291K	$0	$0
Long-Term Debt	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	$291K-9.1%	$320K	N/A	N/A
Total Equity	$1.0M+19.9%	$864K-40.1%	$1.4M-52.6%	$3.0M-41.5%	$5.2M+136.8%	$2.2M+192.6%	$751K+145.6%	-$1.6M-47.7%	-$1.1M-227.9%	$871K-29.6%	$1.2M-32.8%	$1.8M-52.4%	$3.9M-43.3%	$6.8M-59.3%	$16.7M
Retained Earnings	-$45.1M-4.5%	-$43.2M-2.0%	-$42.3M-6.5%	-$39.8M-7.9%	-$36.8M+5.3%	-$38.9M-3.0%	-$37.8M-6.7%	-$35.4M-2.1%	-$34.6M-6.6%	-$32.5M-3.9%	-$31.3M-6.8%	-$29.3M-10.5%	-$26.5M-16.2%	-$22.8M-170.3%	-$8.4M

Metric	Q3'2610-Q	Q2'2610-Q	Q1'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K
Total Assets	$3.2M+136.6%	$4.4M+150.9%	$1.7M+121.4%	$1.2M+28.1%	$1.4M+27.8%	$1.8M+43.0%	$758K-43.6%	$906K-40.9%
Current Assets	$2.7M+230.7%	$3.9M+219.9%	$1.1M+298.4%	$632K+28.7%	$807K+25.7%	$1.2M+49.1%	$289K-68.9%	$491K-56.1%
Cash & Equivalents	$2.6M+234.2%	$790K-33.2%	$1.1M+309.3%	$590K+37.9%	$780K+31.2%	$1.2M+54.7%	$269K-70.2%	$428K-60.3%
Short-Term Investments	$0	$3.0M	$0	$0	$0	$0	$0	$0
Long-Term Investments	$0	$0	$0	$0	$0	$0	$0	$0
Total Liabilities	$246K-70.4%	$145K-72.0%	$172K+143.1%	$125K+193.9%	$833K+1609.6%	$516K+1155.4%	$71K+5.7%	$43K-54.3%
Current Liabilities	$246K-70.4%	$145K-72.0%	$172K+143.1%	$125K+193.9%	$833K+1609.6%	$516K+1155.4%	$71K+5.7%	$43K-54.3%
Non-Current Liabilities	$0	$0	$0	$0	$0	$0	$0	$0
Total Equity	$3.0M+468.8%	$4.3M+243.5%	$1.5M+119.2%	$1.0M+19.9%	$519K-48.6%	$1.2M+4.5%	$688K-46.2%	$864K-40.1%
Retained Earnings	-$47.5M-6.8%	-$46.2M-5.7%	-$45.4M-4.5%	-$45.1M-4.5%	-$44.5M-3.5%	-$43.6M-2.2%	-$43.4M-2.0%	-$43.2M-2.0%

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

TMRC Cash Flow Statement

TMRC quarterly cash flow statement

Metric	TTM	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Operating Cash Flow	-$1.8M	-$897K-35.5%	-$662K+49.5%	-$1.3M+52.8%	-$2.8M-363.0%	-$599K+62.5%	-$1.6M-381.0%	-$332K-129.7%	-$145K+16.7%	-$174K+71.4%	-$608K+56.1%	-$1.4M+29.2%	-$2.0M+43.4%	-$3.5M+68.9%	-$11.1M-486.1%	-$1.9M
Depreciation & Amortization	N/A	N/A	N/A	$1K-83.3%	$7K+71.4%	$4K	$0	$0-100.0%	$5K-46.4%	$10K-63.5%	$28K-22.2%	$36K-45.9%	$66K-23.7%	$86K+1.7%	$85K+324.3%	$20K
Stock-Based Compensation	N/A	$261K+6.7%	$245K-74.3%	$952K+89.1%	$503K-36.1%	$788K+416.6%	$153K-77.4%	$676K+517.4%	$109K+478.8%	$19K-90.0%	$189K-57.1%	$440K-42.6%	$767K+103.7%	$377K-88.8%	$3.4M-1.5%	$3.4M
Capital Expenditures	N/A	N/A	N/A	N/A	N/A	$35K	N/A	N/A	N/A	N/A	N/A	N/A	$640-8.0%	$696-99.6%	$158K-25.0%	-$211K
Free Cash Flow	N/A	N/A	N/A	N/A	N/A	-$634K	N/A	N/A	N/A	N/A	N/A	N/A	-$2.0M+43.4%	-$3.5M+69.4%	-$11.3M-435.0%	-$2.1M
Investing Cash Flow	N/A	-$39K-133.5%	-$17K-103.2%	$513K+169.9%	-$734K-126.9%	$2.7M	N/A	$0	$0	$0+100.0%	-$5K	N/A	-$640+99.9%	-$506K-52.2%	-$333K-7.4%	-$310K
Financing Cash Flow	$630K	$1.1M+9881.8%	$11K-71.1%	$38K-84.1%	$240K+4.6%	$229K-90.9%	$2.5M+18.6%	$2.1M+1112.8%	$175K+3.3%	$170K-72.4%	$616K	N/A	-$29K+83.7%	-$178K-116.1%	$1.1M-94.2%	$19.0M
Share Buybacks	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	$133K	N/A	N/A

Metric	Q3'2610-Q	Q2'2610-Q	Q1'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K
Operating Cash Flow	-$1.2M-193.0%	-$313K-69.2%	-$118K+2.9%	-$188K-6.3%	-$402K-136.7%	-$185K-32.2%	-$121K+30.7%	-$177K+41.6%
Stock-Based Compensation	N/A	N/A	$87K+64.7%	N/A	N/A	N/A	$53K-8.6%	N/A
Investing Cash Flow	N/A	N/A	N/A	-$1K	$0	$0	-$38K	N/A
Financing Cash Flow	$0	$0	$630K	$0	$0	N/A	N/A	N/A

Not reported in any period shown, so not listed: Depreciation & Amortization, Capital Expenditures, Free Cash Flow, Dividends Paid, Share Buybacks.

TMRC Financial Ratios

Margins and returns are percentages; the remaining ratios are unitless multiples. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.

TMRC quarterly financial ratios

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Return on Equity	-186.7%-90.2pp	-96.4%+83.4pp	-179.9%-84.4pp	-95.4%-134.7pp	39.3%+91.2pp	-51.9%+265.1pp	-317.0%	N/A	N/A	-139.4%+21.1pp	-160.4%-8.8pp	-151.6%-56.2pp	-95.5%+115.6pp	-211.1%-169.1pp	-42.0%
Return on Assets	-166.5%-74.6pp	-91.9%+77.0pp	-168.9%-74.8pp	-94.2%-132.0pp	37.8%+72.5pp	-34.7%+74.4pp	-109.1%+78.7pp	-187.8%	N/A	-67.0%+40.4pp	-107.5%+14.1pp	-121.6%-38.0pp	-83.6%+113.6pp	-197.2%-156.6pp	-40.6%
Current Ratio	5.04-6.5x	11.51-0.5x	11.98-52.2x	64.16+38.4x	25.72+23.0x	2.68+1.4x	1.28+1.3x	0.020.0x	0.010.0x	0.010.0x	0.05-2.2x	2.23-7.2x	9.45-4.3x	13.78-15.4x	29.19
Debt-to-Equity	0.12+0.1x	0.050.0x	0.06+0.1x	0.010.0x	0.04-0.5x	0.50-1.4x	1.91	N/A	N/A	1.08+0.6x	0.49+0.3x	0.16+0.1x	0.080.0x	0.070.0x	0.03

Metric	Q3'2610-Q	Q2'2610-Q	Q1'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K
Return on Equity	-44.5%+110.3pp	-18.8%+0.7pp	-16.3%+17.0pp	N/A	-154.8%-129.6pp	-19.5%-7.6pp	-33.3%-16.0pp	N/A
Return on Assets	-41.1%+18.3pp	-18.2%-4.4pp	-14.6%+15.6pp	N/A	-59.4%-35.4pp	-13.8%-2.3pp	-30.2%-13.7pp	N/A
Current Ratio	10.84+9.9x	26.82+24.5x	6.67+2.6x	5.04-6.5x	0.97-12.2x	2.35-17.5x	4.07-9.8x	11.51-0.5x
Debt-to-Equity	0.08-1.5x	0.03-0.4x	0.110.0x	0.12+0.1x	1.60+1.6x	0.42+0.4x	0.10+0.1x	0.050.0x

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

Where Texas Mineral Res Corp Ranks

Frequently Asked Questions

Is Texas Mineral Res Corp profitable?

No, Texas Mineral Res Corp (TMRC) reported a net income of -$1.9M in fiscal year 2025.

What is Texas Mineral Res Corp's return on equity (ROE)?

Texas Mineral Res Corp (TMRC) has a return on equity of -186.7% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

What is Texas Mineral Res Corp's operating cash flow?

Texas Mineral Res Corp (TMRC) recorded an outflow of $897K in operating cash flow during fiscal year 2025, representing cash used by core business activities.

What are Texas Mineral Res Corp's total assets?

Texas Mineral Res Corp (TMRC) had $1.2M in total assets as of fiscal year 2025, including both current and long-term assets.

How many shares does Texas Mineral Res Corp have outstanding?

Texas Mineral Res Corp (TMRC) had 81M shares outstanding as of fiscal year 2025.

What is Texas Mineral Res Corp's current ratio?

Texas Mineral Res Corp (TMRC) had a current ratio of 5.04 as of fiscal year 2025, which is generally considered healthy.

What is Texas Mineral Res Corp's debt-to-equity ratio?

Texas Mineral Res Corp (TMRC) had a debt-to-equity ratio of 0.12 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is Texas Mineral Res Corp's return on assets (ROA)?

Texas Mineral Res Corp (TMRC) had a return on assets of -166.5% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

How does Texas Mineral Res Corp's liquidity compare with its operating cash outflow?

At the end of fiscal year 2025, Texas Mineral Res Corp (TMRC) held $590K in cash, cash equivalents and investments, and reported an operating cash outflow of $897K over that year. Dividing the one by the other, the reported balance equals about 8 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 Texas Mineral Res Corp's Piotroski F-Score?

Texas Mineral Res Corp (TMRC) has a Piotroski F-Score of 1 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 Texas Mineral Res Corp's earnings high quality?

Texas Mineral Res Corp (TMRC) reported a net loss of $1.9M while operations used $897K 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 Texas Mineral Res Corp cover its interest payments?

Texas Mineral Res Corp (TMRC) reported an operating loss of $1.2M against $746K 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.