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Cantel Medical Corp (NYSE:CMN)
Interest Coverage
34.63 (As of Oct. 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. Cantel Medical Corp's Operating Income for the three months ended in Oct. 2014 was $19.0 Mil. Cantel Medical Corp's Interest Expense for the three months ended in Oct. 2014 was $-0.6 Mil. Cantel Medical Corp's interest coverage for the quarter that ended in Oct. 2014 was 34.63. The higher the ratio, the stronger the company’s financial strength is.

CMN' s 10-Year Interest Coverage Range
Min: 1.4   Max: 9999.99
Current: 29.8

1.4
9999.99

During the past 13 years, the highest interest coverage of Cantel Medical Corp was 9999.99. The lowest was 1.40. And the median was 12.19.

CMN's Interest Coverageis ranked higher than
69% of the 181 Companies
in the Global Medical Instruments & Supplies industry.

( Industry Median: 32.42 vs. CMN: 29.80 )

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

Cantel Medical 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

Cantel Medical Corp had no debt.

Cantel Medical Corp's Interest Coverage for the fiscal year that ended in Jul. 2014 is calculated as

Here, for the fiscal year that ended in Jul. 2014, Cantel Medical Corp's Interest Expense was $-2.4 Mil. Its Operating Income was $70.9 Mil. And its Long-Term Debt was $80.5 Mil.

Interest Coverage=-1*Operating Income (A: Jul. 2014 )/Interest Expense (A: Jul. 2014 )
=-1*70.928/-2.38
=29.80

Cantel Medical Corp's Interest Coverage for the quarter that ended in Oct. 2014 is calculated as

Here, for the three months ended in Oct. 2014, Cantel Medical Corp's Interest Expense was $-0.6 Mil. Its Operating Income was $19.0 Mil. And its Long-Term Debt was $93.5 Mil.

Interest Coverage=-1*Operating Income (Q: Oct. 2014 )/Interest Expense (Q: Oct. 2014 )
=-1*19.047/-0.55
=34.63

* 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.

Cantel Medical Corp Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
interest_coverage 9.903.634.803.8810.4027.9432.6413.9721.8329.80

Cantel Medical Corp Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
interest_coverage 17.9224.7221.3218.9922.7527.8728.2330.4833.4234.63
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