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Majesco Entertainment Co (NAS:COOL)
Interest Coverage
No Debt (As of Jan. 2016)

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. Majesco Entertainment Co's Operating Income for the three months ended in Jan. 2016 was $-0.65 Mil. Majesco Entertainment Co's Interest Expense for the three months ended in Jan. 2016 was $0.00 Mil. Majesco Entertainment Co has no debt. 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

The company had no debt.


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

Majesco Entertainment Co's Interest Coverage for the fiscal year that ended in Oct. 2014 is calculated as

Here, for the fiscal year that ended in Oct. 2014, Majesco Entertainment Co's Interest Expense was $-0.36 Mil. Its Operating Income was $-13.33 Mil. And its Long-Term Debt was $0.00 Mil.

Majesco Entertainment Co did not have earnings to cover the interest expense.

Majesco Entertainment Co's Interest Coverage for the quarter that ended in Jan. 2016 is calculated as

Here, for the three months ended in Jan. 2016, Majesco Entertainment Co's Interest Expense was $0.00 Mil. Its Operating Income was $-0.65 Mil. And its Long-Term Debt was $0.00 Mil.

Majesco Entertainment Co 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.

Majesco Entertainment Co Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
interest_coverage At LossAt Loss4.28At LossAt Loss9.053.87At LossAt LossAt Loss

Majesco Entertainment Co Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
interest_coverage At LossAt LossAt LossAt LossAt LossAt LossAt LossNo DebtNo DebtNo Debt
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