Fiat Industrial SpA (MIL:FI) Interest Coverage : 5.24 (As of Jun. 2013)

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What is Fiat Industrial SpA Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Fiat Industrial SpA's Operating Income for the three months ended in Jun. 2013 was €613 Mil. Fiat Industrial SpA's Interest Expense for the three months ended in Jun. 2013 was €-117 Mil. Fiat Industrial SpA's interest coverage for the quarter that ended in Jun. 2013 was 5.24. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Fiat Industrial SpA's Interest Coverage or its related term are showing as below:

MIL:FI' s Interest Coverage Range Over the Past 10 Years
Min: 0 Med: 0 Max: 4.06
Current: 4.06

MIL:FI's Interest Coverage is not ranked
in the Farm & Heavy Construction Machinery industry.
Industry Median: 9.32 vs MIL:FI: 4.06

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Fiat Industrial SpA Interest Coverage Historical Data

The historical data trend for Fiat Industrial SpA's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Fiat Industrial SpA Interest Coverage Chart

Fiat Industrial SpA Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Interest Coverage

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3.14

0.48

2.48

2.98

4.07

Fiat Industrial SpA Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13
Interest Coverage	Get a 7-Day Free Trial										4.85	5.15	2.78	3.27	5.24

Competitive Comparison of Fiat Industrial SpA's Interest Coverage

For the Farm & Heavy Construction Machinery subindustry, Fiat Industrial SpA's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Fiat Industrial SpA's Interest Coverage Distribution in the Farm & Heavy Construction Machinery Industry

For the Farm & Heavy Construction Machinery industry and Industrials sector, Fiat Industrial SpA's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Fiat Industrial SpA's Interest Coverage falls into.

Fiat Industrial SpA Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Fiat Industrial SpA's Interest Coverage for the fiscal year that ended in Dec. 2012 is calculated as

Here, for the fiscal year that ended in Dec. 2012, Fiat Industrial SpA's Interest Expense was €-458 Mil. Its Operating Income was €1,862 Mil. And its Long-Term Debt & Capital Lease Obligation was €10,925 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2012 )	/	Interest Expense (A: Dec. 2012 )
	=	-1	*	1862	/	-458
	=	4.07

Fiat Industrial SpA's Interest Coverage for the quarter that ended in Jun. 2013 is calculated as

Here, for the three months ended in Jun. 2013, Fiat Industrial SpA's Interest Expense was €-117 Mil. Its Operating Income was €613 Mil. And its Long-Term Debt & Capital Lease Obligation was €11,569 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2013 )	/	Interest Expense (Q: Jun. 2013 )
	=	-1	*	613	/	-117
	=	5.24

The higher the ratio, the stronger the company's Financial Strength is.

Fiat Industrial SpA (MIL:FI) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Fiat Industrial SpA Interest Coverage Related Terms

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Fiat Industrial SpA (MIL:FI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Farm & Heavy Construction Machinery » Fiat Industrial SpA (MIL:FI) » Definitions » Interest Coverage

Traded in Other Exchanges

N/A

Address

Website

http://www.fiatindustrial.com

Fiat Industrial SpA operates in the capital goods sector. Each of the Group's businesses is a major international player in its respective industry sector: Iveco, CNH-Case New Holland and FPT Industrial. These three sectors design, produce and sell trucks, commercial vehicles, buses, special vehicles (Iveco), tractors, and agricultural and construction equipment (CNH), in addition to engines and transmissions for those vehicles and engines for marine applications (FPT Industrial). Agricultural equipment is sold under the New Holland Agriculture and Case IH and, in the premium segment in Europe, Steyr brands. Construction equipment is sold under the New Holland Construction and Case Construction brands, as well as the Kobelco brand in North America. Iveco designs, manufactures and sells a wide range of light (2.8-6 tons GVW), medium (6-16 tons GVW) and heavy (above 16 tons GVW) commercial vehicles for on-road and off-road use. In addition to its main product offer, the Company also offers after-sales and financing services, in addition to services related to used-vehicles. FPT Industrial is specialized in the design, production and sale of propulsion and transmission systems for on- and off-road trucks and commercial vehicles, as well as engines for marine application and power generation.