Company research
How much of operating profit goes to interest, and how that changed with rates
Rates rose by five points and the share of operating profit that large US companies spend on interest is still below where it was in 2019. That is not a paradox — it is what refinancing at the bottom bought them — and it is measurable in the filings rather than assertable from the yield curve.
Non-financial companies · fiscal years 2015–2025
FY2015–FY2025 · non-financial
- Interest, FY2025
- 11.0%
- of operating profit
- Before the tightening
- 14.2%
- FY2019, same measure
- Peak of the series
- 14.7%
- FY2020 · low 9.0% in FY2022
- Spending over a quarter
- 63 of 292
- 12 spend more than half
- Interest paid
- $235B
- 1.67% of revenue
| Fiscal year | Of operating profit | Median company | Of revenue | Over 25% | Over 50% | Interest paid | Companies |
|---|---|---|---|---|---|---|---|
| 2025 | 11.01% | 12.46% | 1.67% | 63 | 12 | $235B | 292 |
| 2024 | 11.72% | 12.68% | 1.69% | 72 | 18 | $224B | 288 |
| 2023 | 11.97% | 11.99% | 1.64% | 59 | 12 | $206B | 283 |
| 2022 | 8.99% | 9.84% | 1.29% | 57 | 14 | $153B | 276 |
| 2021 | 10.72% | 10.28% | 1.53% | 70 | 18 | $164B | 271 |
| 2020 | 14.69% | 13.77% | 1.91% | 82 | 27 | $158B | 248 |
| 2019 | 14.19% | 12.88% | 1.77% | 77 | 23 | $162B | 271 |
| 2018 | 13.02% | 11.84% | 1.71% | 65 | 16 | $150B | 270 |
| 2017 | 12.84% | 11.47% | 1.65% | 76 | 25 | $132B | 272 |
| 2016 | 12.55% | 11.28% | 1.61% | 65 | 21 | $118B | 259 |
| 2015 | 10.42% | 9.36% | 1.40% | 52 | 19 | $100B | 253 |
| Sector | Of operating profit | In FY2015 | Change | Of revenue | Over 25% | Companies |
|---|---|---|---|---|---|---|
| Utilities | 44.17% | 28.24% | +15.9 pts | 9.67% | 20 | 22 |
| Real Estate | 35.08% | 32.15% | +2.9 pts | 8.01% | 10 | 14 |
| Energy | 14.61% | 18.19% | -3.6 pts | 1.73% | 6 | 25 |
| Industrials | 14.11% | 11.02% | +3.1 pts | 1.98% | 5 | 51 |
| Healthcare | 12.10% | 7.58% | +4.5 pts | 1.09% | 6 | 41 |
| Consumer Defensive | 9.85% | 10.10% | -0.3 pts | 0.81% | 3 | 19 |
| Communication Services | 9.72% | 12.55% | -2.8 pts | 2.47% | 3 | 14 |
| Consumer Cyclical | 9.47% | 8.50% | +1.0 pts | 1.00% | 3 | 30 |
| Basic Materials | 6.00% | 16.27% | -10.3 pts | 1.47% | 1 | 12 |
| Technology | 4.45% | 3.52% | +0.9 pts | 1.27% | 6 | 64 |
Largest US-listed operating companies by market capitalisation, one line per company, foreign private issuers (ADRs and 20-F filers) excluded. Financial Services excluded: for a bank, interest expense is a cost of revenue rather than a burden on operating profit. The universe and every filing behind them are listed in full.
The rate rose in 2022. The bill did not.
Across the non-financial companies here, interest took 14.2% of operating profit in FY2019 and 11.0% in FY2025 — after the fastest tightening cycle in forty years. The low point of the whole series is FY2022 at 9.0%, which is *after* rates started rising, not before.
The explanation is maturity, not magic. Large companies borrow at fixed rates for years, and a great many of them refinanced during 2020 and 2021 at the cheapest coupons in modern history. A policy rate does nothing to that debt until it matures, so the burden here rises as maturities arrive rather than when the central bank moves. That is why the series turns up in FY2023 and climbs slowly rather than jumping.
Read the two count columns before drawing comfort from the aggregate. In FY2025, 63 of the 292 companies with positive operating profit spent more than a quarter of it on interest and 12 spent more than half. The aggregate is dominated by a handful of enormous, barely-levered profit machines; the tail is where a refinancing wall actually bites, and watching that count is a better early warning than watching the average.
Financial companies are excluded from every figure here, deliberately. For a bank, interest expense is the cost of the raw material rather than a burden on operating profit, and leaving it in would turn this into a statement about deposit costs and balance-sheet size — a different subject that happens to share a line item.
Questions people ask about this
- Why are financial companies excluded?
- Because for a bank, interest expense is the cost of its raw material rather than a burden on operating profit. Including them would turn the aggregate into a statement about balance-sheet size and deposit costs, which is a different subject with a different meaning. Every figure on this page is for non-financial companies, and the exclusion is stated rather than buried.
- How can the burden be lower after rates rose?
- Because most large companies borrow at fixed rates for years at a time. A company that refinanced in 2020 and 2021 locked in a coupon that a higher policy rate does not touch until that debt matures. The burden here rises as those maturities arrive, not when the central bank moves — which is why the series turns up in 2023 rather than in 2022, and why it is still climbing slowly.
- What does the count of companies over 25% tell me?
- Where the strain actually sits. The aggregate is dominated by companies with enormous operating profits and modest debt, so it can look comfortable while a real tail is struggling. The two count columns are that tail: companies spending more than a quarter, and more than half, of operating profit on interest. Watching those counts is a better early-warning measure than watching the average.
Sources and method
- Data
- SEC filings (EDGAR) — Each company's annual report on Form 10-K. Every company named on the page links to the filing its figures were read from.
- Financial Modeling Prep — Distributor of the filing data, and the source of the market caps used to pick the universe.
- How it was calculated
- Interest expense and operating income from the annual income statement. The headline figure is total interest expense over total operating profit across the companies in scope, computed only over company-years with positive operating profit — a burden ratio against a loss is not interpretable — with the median company and the count of companies over 25% and 50% shown beside it. Financial Services companies are excluded entirely. Same universe as the other filing pages otherwise.
- How often it changes
- Rebuilt from the filings about once a year, after the bulk of the universe has reported. The fiscal year it runs through is at the top of the page.
- Citing this page
Free to quote — please link rather than copy the table.
Plutux. "How much of operating profit goes to interest, and how that changed with rates." Data through FY2025. https://plutux.ai/resources/tools/interest-burden-by-sector
Historical figures for information only — not investment advice, and not a forecast.
Related tools
- Effective tax ratesThe effective rate off the income statements — not the statutory rate — every year since 2015, with the 2017 cut visible in the middle of it.
- The filings behind itThe universe the company research pages are built on, company by company, each one linked to the filing it was read from.
- Revenue per employeeA decade of revenue against the headcount each company actually reported, and the point where the two stopped moving together.
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