Switch to:
Cerner Corp (NAS:CERN)
Interest Coverage
0.00 (As of Sep. 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. Cerner Corp's Operating Income for the three months ended in Sep. 2014 was $188 Mil. Cerner Corp's Interest Expense for the three months ended in Sep. 2014 was $0 Mil. Cerner Corp's interest coverage for the quarter that ended in Sep. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Ben Graham prefers companies interest coverage is at least 5. Cerner Corp has enough cash to cover all of its debt. Its financial situation is stable.

CERN' s 10-Year Interest Coverage Range
Min: 1.09   Max: 136.3
Current: 136.3

1.09
136.3

During the past 13 years, the highest interest coverage of Cerner Corp was 136.30. The lowest was 1.09. And the median was 16.30.

CERN's Interest Coverageis ranked higher than
61% of the 1371 Companies
in the Global Health Information Services industry.

( Industry Median: 2350.48 vs. CERN: 136.30 )

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

Cerner Corp 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

Cerner Corp had no debt.

Cerner Corp's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as

Here, for the fiscal year that ended in Dec. 2013, Cerner Corp's Interest Expense was $-4 Mil. Its Operating Income was $576 Mil. And its Long-Term Debt was $112 Mil.

Interest Coverage=-1*Operating Income (A: Dec. 2013 )/Interest Expense (A: Dec. 2013 )
=-1*576.012/-4.226
=136.30

Cerner Corp's Interest Coverage for the quarter that ended in Sep. 2014 is calculated as

Here, for the three months ended in Sep. 2014, Cerner Corp's Interest Expense was $0 Mil. Its Operating Income was $188 Mil. And its Long-Term Debt was $87 Mil.

Cerner Corp 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.

Cerner Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
interest_coverage 12.1514.4313.2217.1026.4434.3852.0286.09112.80136.30

Cerner Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
interest_coverage At LossAt LossAt LossAt LossAt LossAt LossAt LossAt LossAt LossAt Loss
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK