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Air T, Inc. (NAS:AIRT)
Interest Coverage
159.20 (As of Dec. 2013)

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. Air T, Inc.'s Operating Income for the three months ended in Dec. 2013 was $0.8 Mil. Air T, Inc.'s Interest Expense for the three months ended in Dec. 2013 was $-0.0 Mil. Air T, Inc.'s interest coverage for the quarter that ended in Dec. 2013 was 159.20. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Air T, Inc. has no debt.

AIRT' s 10-Year Interest Coverage Range
Min: 11.35   Max: 9999.99
Current: No Debt

11.35
9999.99

During the past 13 years, the highest interest coverage of Air T, Inc. was 9999.99. The lowest was 11.35. And the median was 3438.00.

AIRT's Interest Coverageis ranked higher than
96% of the 640 Companies
in the Global Integrated Shipping & Logistics industry.

( Industry Median: 5.52 vs. AIRT: No Debt )

Definition

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

Air T, Inc. did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt is 0, or Interest Expense is positive, then

Air T, Inc. had no debt.

Air T, Inc.'s Interest Coverage for the fiscal year that ended in Mar. 2013 is calculated as

Here, for the fiscal year that ended in Mar. 2013, Air T, Inc.'s Interest Expense was $0.0 Mil. Its Operating Income was $2.7 Mil. And its Long-Term Debt was $0.0 Mil.

Air T, Inc. had no debt.

Air T, Inc.'s Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, Air T, Inc.'s Interest Expense was $-0.0 Mil. Its Operating Income was $0.8 Mil. And its Long-Term Debt was $0.0 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2013 )/Interest Expense (Q: Dec. 2013 )
=-1*0.796/-0.005
=159.20

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

The higher the ratio, the stronger the company’s financial strength is.


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.


Related Terms

Operating Income, Interest Expense, Financial Strength


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Air T, Inc. Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
interest_coverage At LossAt LossAt Loss18.3829.5663.49339.443,438.00No DebtNo Debt

Air T, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage 919.00No DebtNo Debt109.00351.00No DebtNo DebtNo Debt752.00159.20
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