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Clearfield, Inc. (NAS:CLFD)
Interest Coverage
10,000.00 (As of Dec. 2013)

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. Clearfield, Inc.'s Operating Income for the three months ended in Dec. 2013 was $3.07 Mil. Clearfield, Inc.'s Interest Expense for the three months ended in Dec. 2013 was $0.00 Mil. Clearfield, Inc.'s interest coverage for the quarter that ended in Dec. 2013 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Clearfield, Inc. has no debt.

CLFD' s 10-Year Interest Coverage Range
Min: 90.64   Max: 9999.99
Current: No Debt

90.64
9999.99

During the past 13 years, the highest interest coverage of Clearfield, Inc. was 9999.99. The lowest was 90.64. And the median was 5561.50.

CLFD's Interest Coverageis ranked higher than
87% of the 397 Companies
in the Global Communication Equipment industry.

( Industry Median: 123.29 vs. CLFD: No Debt )

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

Clearfield, 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

Clearfield, Inc. had no debt.

Clearfield, Inc.'s Interest Coverage for the fiscal year that ended in Sep. 2013 is calculated as

Here, for the fiscal year that ended in Sep. 2013, Clearfield, Inc.'s Interest Expense was $0.00 Mil. Its Operating Income was $7.45 Mil. And its Long-Term Debt was $0.00 Mil.

Clearfield, Inc. had no debt.

Clearfield, Inc.'s Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, Clearfield, Inc.'s Interest Expense was $0.00 Mil. Its Operating Income was $3.07 Mil. And its Long-Term Debt was $0.00 Mil.

Clearfield, 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.

Clearfield, Inc. Annual Data

Mar05Mar06Mar07Sep07Sep08Sep09Sep10Sep11Sep12Sep13
interest_coverage At LossAt LossAt LossAt Loss90.64201.831,123.00No DebtNo DebtNo Debt

Clearfield, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt
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