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AutoZone Inc (NYSE:AZO)
Interest Coverage
0.00 (As of Nov. 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. AutoZone Inc's Operating Income for the three months ended in Nov. 2014 was $409 Mil. AutoZone Inc's Interest Expense for the three months ended in Nov. 2014 was $0 Mil. AutoZone Inc's interest coverage for the quarter that ended in Nov. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

AZO' s 10-Year Interest Coverage Range
Min: 3.85   Max: 9999.99
Current: 10.81

3.85
9999.99

During the past 13 years, the highest interest coverage of AutoZone Inc was 9999.99. The lowest was 3.85. And the median was 9.50.

AZO's Interest Coverageis ranked higher than
60% of the 890 Companies
in the Global Specialty Retail industry.

( Industry Median: 32.43 vs. AZO: 10.81 )

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

AutoZone 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

AutoZone Inc had no debt.

AutoZone Inc's Interest Coverage for the fiscal year that ended in Aug. 2014 is calculated as

Here, for the fiscal year that ended in Aug. 2014, AutoZone Inc's Interest Expense was $-169 Mil. Its Operating Income was $1,830 Mil. And its Long-Term Debt was $4,163 Mil.

Interest Coverage=-1*Operating Income (A: Aug. 2014 )/Interest Expense (A: Aug. 2014 )
=-1*1830.223/-169.359
=10.81

AutoZone Inc's Interest Coverage for the quarter that ended in Nov. 2014 is calculated as

Here, for the three months ended in Nov. 2014, AutoZone Inc's Interest Expense was $0 Mil. Its Operating Income was $409 Mil. And its Long-Term Debt was $3,863 Mil.

AutoZone Inc had no debt.

* 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.

AutoZone Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
interest_coverage 9.529.178.659.338.048.178.669.199.4810.81

AutoZone Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
interest_coverage At LossAt LossAt Loss10.83At LossAt LossAt LossAt LossAt LossAt Loss
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