Interest is a contract; the dividend is a choice. When profit falls, the interest bill still has to be paid in full, and interest cover — operating profit ÷ interest — shows how much room is left once it has been. Net debt and gearing show how large that bill could grow, especially when cheap loans come up for refinancing at higher rates.
Lenders also write covenants into loan agreements: limits such as a maximum ratio of debt to profit, and sometimes direct restrictions on paying dividends. Breaking one can let lenders demand their money back early, so a company close to a limit may cut its dividend to stay inside it. A holding's detail shows Net Debt / EBITDA and Debt-to-Equity. Interest cover and covenants aren't in the app; they're in the annual report, usually in the notes on borrowings.
Interest cover of 2.5×. Halve the profit and the interest bill stays at £40m, leaving £10m.
Educational content only. It is not personal financial advice.