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Barnes & Noble Inc (NYSE:BKS)
Interest Coverage
0.00 (As of Jul. 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. Barnes & Noble Inc's Operating Income for the three months ended in Jul. 2014 was $-21 Mil. Barnes & Noble Inc's Interest Expense for the three months ended in Jul. 2014 was $-6 Mil. Barnes & Noble Inc's interest coverage for the quarter that ended in Jul. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

BKS' s 10-Year Interest Coverage Range
Min: 1.16   Max: 9999.99
Current: 1.16

1.16
9999.99

During the past 13 years, the highest interest coverage of Barnes & Noble Inc was 9999.99. The lowest was 1.16. And the median was 8.60.

BKS's Interest Coverageis ranked lower than
56% of the 882 Companies
in the Global Specialty Retail industry.

( Industry Median: 32.14 vs. BKS: 1.16 )

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

Barnes & Noble 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

Barnes & Noble Inc had no debt.

Barnes & Noble Inc's Interest Coverage for the fiscal year that ended in Apr. 2014 is calculated as

Here, for the fiscal year that ended in Apr. 2014, Barnes & Noble Inc's Interest Expense was $-30 Mil. Its Operating Income was $34 Mil. And its Long-Term Debt was $0 Mil.

Interest Coverage=-1*Operating Income (A: Apr. 2014 )/Interest Expense (A: Apr. 2014 )
=-1*34.192/-29.507
=1.16

Barnes & Noble Inc's Interest Coverage for the quarter that ended in Jul. 2014 is calculated as

Here, for the three months ended in Jul. 2014, Barnes & Noble Inc's Interest Expense was $-6 Mil. Its Operating Income was $-21 Mil. And its Long-Term Debt was $0 Mil.

Barnes & Noble Inc did not have earnings to cover the interest expense.

* 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.

Barnes & Noble Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14
interest_coverage 22.15177.97No DebtNo DebtNo DebtAt LossAt LossAt LossAt Loss1.16

Barnes & Noble Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
interest_coverage At LossAt Loss0.88At LossAt LossAt LossAt LossNo DebtNo DebtAt Loss
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