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Blyth Inc (NYSE:BTH)
Interest Coverage
At Loss (As of Jun. 2015)

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. Blyth Inc's Operating Income for the three months ended in Jun. 2015 was \$-7.1 Mil. Blyth Inc's Interest Expense for the three months ended in Jun. 2015 was \$-0.8 Mil. Blyth Inc did not have earnings to cover the interest expense. The higher the ratio, the stronger the companys financial strength is.

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

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

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

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

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

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

Here, for the fiscal year that ended in Dec. 2014, Blyth Inc's Interest Expense was \$-7.0 Mil. Its Operating Income was \$7.1 Mil. And its Long-Term Debt was \$4.6 Mil.

 Interest Coverage = -1 * Operating Income (A: Dec. 2014 ) / Interest Expense (A: Dec. 2014 ) = -1 * 7.097 / -7.042 = 1.01

Blyth Inc's Interest Coverage for the quarter that ended in Jun. 2015 is calculated as

Here, for the three months ended in Jun. 2015, Blyth Inc's Interest Expense was \$-0.8 Mil. Its Operating Income was \$-7.1 Mil. And its Long-Term Debt was \$38.7 Mil.

 Blyth 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 local exchange's 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

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Blyth Inc Annual Data

 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Dec12 Dec13 Dec14 interest_coverage 7.65 2.19 0.82 1.99 0.40 3.87 6.47 13.96 1.97 1.01

Blyth Inc Quarterly Data

 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 interest_coverage 5.27 0.70 At Loss 27.80 At Loss At Loss At Loss 6.71 At Loss At Loss
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