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Apollo Education Group Inc (NAS:APOL)
Interest Coverage
59.04 (As of May. 2014)

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. Apollo Education Group Inc's Operating Income for the three months ended in May. 2014 was $113 Mil. Apollo Education Group Inc's Interest Expense for the three months ended in May. 2014 was $-2 Mil. Apollo Education Group Inc's interest coverage for the quarter that ended in May. 2014 was 59.04. The higher the ratio, the stronger the company’s financial strength is.

APOL' s 10-Year Interest Coverage Range
Min: 48.88   Max: 9999.99
Current: 48.88

48.88
9999.99

During the past 13 years, the highest interest coverage of Apollo Education Group Inc was 9999.99. The lowest was 48.88. And the median was 233.06.

APOL's Interest Coverageis ranked higher than
62% of the 84 Companies
in the Global Education & Training Services industry.

( Industry Median: 48.88 vs. APOL: 48.88 )

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

Apollo Education Group 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

Apollo Education Group Inc had no debt.

Apollo Education Group Inc's Interest Coverage for the fiscal year that ended in Aug. 2013 is calculated as

Here, for the fiscal year that ended in Aug. 2013, Apollo Education Group Inc's Interest Expense was $-9 Mil. Its Operating Income was $427 Mil. And its Long-Term Debt was $64 Mil.

Interest Coverage=-1*Operating Income (A: Aug. 2013 )/Interest Expense (A: Aug. 2013 )
=-1*427.414/-8.745
=48.88

Apollo Education Group Inc's Interest Coverage for the quarter that ended in May. 2014 is calculated as

Here, for the three months ended in May. 2014, Apollo Education Group Inc's Interest Expense was $-2 Mil. Its Operating Income was $113 Mil. And its Long-Term Debt was $40 Mil.

Interest Coverage=-1*Operating Income (Q: May. 2014 )/Interest Expense (Q: May. 2014 )
=-1*113.064/-1.915
=59.04

* 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.

Apollo Education Group Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
interest_coverage At LossNo DebtNo DebtNo DebtNo Debt233.0685.00107.6357.5948.88

Apollo Education Group Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
interest_coverage 59.4079.7015.61113.1014.2468.0213.0081.403.6059.04
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