Debt-to-equity and interest coverage are the two ratios that reveal balance-sheet risk before it shows up in the share price, and the second-quarter 2026 filings give a wide spread of readings. Boeing (BA) carried $45.9 billion of debt against $6.1 billion of equity, a debt-to-equity ratio of 7.5, and its $156 million of quarterly operating earnings covered $600 million of interest expense only 0.26 times [2]. Verizon (VZ) had a ratio of 1.57 with coverage of 3.6 times, Coca-Cola (KO) 1.20 with coverage of 12.7 times, and ExxonMobil (XOM) and Alphabet (GOOGL) ratios of 0.16 and 0.15 with interest costs that are trivial next to earnings [3] [4] [5] [6]. This article explains both ratios and shows how to read them as of August 28, 2026.
What debt-to-equity and interest coverage measure
Debt-to-equity divides total borrowings by shareholders' equity. It shows how much of the company's capital comes from lenders rather than owners. The ratio depends on the industry, on accounting choices and on buybacks that shrink equity, so it should be compared with peers and with the company's own history. Interest coverage divides operating income (or earnings before interest and taxes) by interest expense. It shows how many times the business can pay its interest from current profit. Coverage below 2 means a modest fall in earnings could threaten payments; coverage above 8 means interest is a minor cost.
The two ratios answer different questions. Debt-to-equity is a stock measure of how much has been borrowed; coverage is a flow measure of whether the borrowing is affordable today. A company can have high leverage and comfortable coverage, as Coca-Cola does, or modest leverage and poor coverage if profits collapse. Investors who track both in the quarterly statements available through DataPorium's stock market analytics can see a deterioration one or two quarters before credit markets react [1].
Debt-to-equity and interest coverage for five companies, second quarter 2026
| Company (quarter end) | Total debt | Shareholders' equity | Debt to equity | Quarterly interest expense | Quarterly operating income | Interest coverage | Cash and securities |
|---|---|---|---|---|---|---|---|
| Boeing (Jun 30, 2026) | $45,900M | $6,100M | 7.5 | $600M | $156M | 0.3x | $20,022M |
| Verizon (Jun 30, 2026) | $165,231M | $105,196M | 1.57 | $1,985M | $7,179M | 3.6x | n/a |
| Coca-Cola (Jul 3, 2026) | $43,543M | $36,150M | 1.20 | $369M | $4,672M | 12.7x | $13,529M |
| ExxonMobil (Jun 30, 2026) | $42,368M | $259,380M | 0.16 | $227M | net income $14,525M | above 60x | $10,588M |
| Alphabet (Jun 30, 2026) | $98,165M (long-term) | $640,480M | 0.15 | $533M (Q1 2026) | $40,770M | above 70x | $242,474M |
Figures are from each company's Form 10-Q for the period shown; Alphabet's interest expense is the first-quarter 2026 figure from DataPorium's income statement, and ExxonMobil's coverage is shown against net income because the filing reports interest separately from an operating income line [1] [2] [3] [4] [5] [6].
Boeing: the ratios flag the risk plainly
Boeing's second-quarter 2026 10-Q reports revenue of $24,560 million, earnings from operations of $156 million, a net loss of $428 million and interest and debt expense of $600 million, with $1,216 million of interest for the six months [2]. Short-term debt of $4,565 million and long-term debt of $41,335 million total $45,900 million against equity of $6,100 million [2]. Coverage of 0.26 times means operating profit paid about a quarter of the interest bill; the rest came from the $20,022 million of cash and short-term investments on hand, which is why the company can run at these ratios for a time [2]. DataPorium's history shows equity of only about $6.0 billion at the end of March as well, so the position is not new, but the ratios say the balance sheet has no cushion for another operational setback [1].
Verizon and Coca-Cola: leverage that earnings can carry
Verizon's $165,231 million of debt is the largest in the table, split between $21,783 million maturing within a year and $143,448 million of long-term debt, against equity of $105,196 million [3]. Quarterly operating income of $7,179 million covered interest of $1,985 million 3.6 times, and six-month operating cash flow of $18,419 million exceeded capital spending of $8,210 million by a wide margin [3]. The debt is heavy but serviceable, which is the profile of a regulated-style utility; the risk is that rising rates lift the interest line faster than revenue grows.
Coca-Cola's ratio of 1.20 looks high next to its consumer peers, but the composition matters. Its 10-Q shows loans and notes payable of $48 million, current maturities of $6,494 million and long-term debt of $37,001 million, with $13,529 million of cash and short-term investments and equity of $36,150 million [5]. Interest expense of $369 million against operating income of $4,672 million is coverage of 12.7 times, and six-month operating cash flow of $7,543 million dwarfs $684 million of capital spending [5]. The leverage is a financing choice, not a strain.
ExxonMobil and Alphabet: why low ratios still deserve a look
ExxonMobil's debt of $42,368 million, split between $10,139 million short term and $32,229 million long term, is small next to $259,380 million of equity, and quarterly interest of $227 million compares with net income of $14,525 million [4]. Six-month operating cash flow of $32,260 million against $12,997 million of capital additions leaves ample room [4]. Alphabet holds $242,474 million of cash and marketable securities against $98,165 million of long-term debt, a net cash position, and its first-quarter interest expense of $533 million is negligible beside $40,770 million of second-quarter operating income [1] [6]. The point of checking is the trend: Alphabet's debt has grown as it funds data centers, and DataPorium's cash flow statements show $31.4 billion of debt issued in the first quarter of 2026 alone [1]. Low ratios today do not guarantee low ratios in two years.
A simple screen for balance-sheet risk
- Flag debt-to-equity above 2.0 or negative equity, then check whether buybacks rather than losses explain the small equity base.
- Flag interest coverage below 3.0 on the latest quarter, and below 2.0 on a trailing twelve-month basis.
- Read the maturity schedule: Verizon's $21,783 million due within a year and Coca-Cola's $6,494 million must be refinanced at current rates [3] [5].
- Compare cash to short-term debt; Boeing's $20,022 million of cash against $4,565 million of short-term debt is what buys it time [2].
- Track the trend quarter by quarter in the DataPorium stock screener, where debt, equity and interest lines are available for every reporting company.
Debt-to-equity tells an investor how much a company has borrowed and interest coverage tells whether it can afford it, and in mid-2026 Boeing fails the second test while Verizon and Coca-Cola pass it despite heavy borrowing.
Key takeaways
- Boeing's debt-to-equity of 7.5 and interest coverage of 0.26 times in the second quarter of 2026 mark the highest balance-sheet risk among the five companies reviewed [2].
- Verizon carries $165.2 billion of debt at a ratio of 1.57 but covers interest 3.6 times from operating income [3].
- Coca-Cola's ratio of 1.20 is offset by 12.7 times coverage and strong cash generation [5].
- ExxonMobil (0.16) and Alphabet (0.15) have negligible interest burdens, though Alphabet's borrowing is rising with its capital spending [1] [4] [6].
- A screen combining debt-to-equity above 2, coverage below 3 and near-term maturities catches most balance-sheet problems early.
Frequently asked questions
What is a good debt-to-equity ratio?
Below 1.0 is comfortable for most industrial and technology companies, while utilities and telecom companies routinely run 1.5 or higher. Ratios above 2.0, or negative equity, call for a close look at interest coverage and cash.
What interest coverage ratio is considered safe?
Coverage above 5 times is generally considered safe, 2 to 5 times adequate, and below 2 times a warning sign. Boeing's 0.26 times in the second quarter of 2026 means operating profit did not cover interest.
Can a company with high debt-to-equity still be a safe investment?
Yes, if earnings and cash flow cover interest comfortably and maturities are spread out, as at Coca-Cola with 12.7 times coverage. The danger is high leverage combined with weak or volatile coverage.
Where do I find total debt and interest expense for a company?
Both are in the quarterly Form 10-Q on SEC EDGAR, and DataPorium's stock pages present the balance sheet and income statement lines, including debt, equity and interest expense, for each quarter.
Sources & References
- [1] DataPorium Stock Market Analytics (quarterly statements)
- [2] The Boeing Company Form 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
- [3] Verizon Communications Inc. Form 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
- [4] Exxon Mobil Corporation Form 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
- [5] The Coca-Cola Company Form 10-Q for the quarter ended July 3, 2026 (SEC EDGAR)
- [6] Alphabet Inc. Form 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
