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To say liquidity and working capital have presented unique challenges for companies throughout the pandemic would be a bit of an understatement. Yet many organizations have found ways to thrive amid the chaos across supply chains, global markets for products and services, funding sources, and other dimensions of the economy.

A late April analysis by S&P Global Market Intelligence found that the interest coverage ratio—the ratio of earnings, before interest and taxes, to interest expense—increased over the course of the pandemic for all kinds of organizations. S&P studied the GAAP filings of public companies outside the financial services sector through time, and the improvements in earnings-to-interest were dramatic.

For investment-grade businesses, the median interest coverage ratio in Q4/2021 was 8.6, considerably higher than the pre-pandemic median of 6.1. For below-investment-grade companies, the median interest coverage ratio was 4.1, a full one and a half times the pre-Covid ratio of 2.8.

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