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CareFusion Corp (NYSE:CFN)
Interest Coverage
0.00 (As of Mar. 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. CareFusion Corp's Operating Income for the three months ended in Mar. 2014 was $159 Mil. CareFusion Corp's Interest Expense for the three months ended in Mar. 2014 was $0 Mil. CareFusion Corp's interest coverage for the quarter that ended in Mar. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

CFN' s 10-Year Interest Coverage Range
Min: 4.29   Max: 10.82
Current: 8.14

4.29
10.82

During the past 8 years, the highest interest coverage of CareFusion Corp was 10.82. The lowest was 4.29. And the median was 6.60.

CFN's Interest Coverageis ranked higher than
59% of the 208 Companies
in the Global Medical Instruments & Supplies industry.

( Industry Median: 23.54 vs. CFN: 8.14 )

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

CareFusion 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

CareFusion Corp had no debt.

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

Here, for the fiscal year that ended in Jun. 2013, CareFusion Corp's Interest Expense was $-76 Mil. Its Operating Income was $619 Mil. And its Long-Term Debt was $1,444 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2013 )/Interest Expense (A: Jun. 2013 )
=-1*619/-76
=8.14

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

Here, for the three months ended in Mar. 2014, CareFusion Corp's Interest Expense was $0 Mil. Its Operating Income was $159 Mil. And its Long-Term Debt was $999 Mil.

CareFusion 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.

CareFusion Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
interest_coverage At LossAt Loss8.4510.824.404.296.386.608.14At Loss

CareFusion Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
interest_coverage At Loss6.74At LossAt Loss7.948.105.80At LossAt LossAt Loss
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