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121.65 (1y: +29%)
Market Cap 76.24 B P/E(ttm) 26.50
Enterprise Value 88.92 B P/B 9.20
DEO- NYSE (USA)
Diageo PLC
  • Currently 1/5
Business Predictability Rank: 1-Star
Back Testing Results:
Average gain of all 1-Star stocks: 1.1% per year.
% of Stocks that are in still loss if held for 10yrs: 45%.
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$121.65
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Diageo PLC Interest Coverage: 10.2 ( as of Dec12)

* All numbers are in millions except for per share data DEO 10-Y Financials »

Definition

Interest Coverage is a ratio that measures the burden of the debt a company carries and how easily the company can pay off its debt. It is calculated by dividing a company’s Operating Income (EBIT) by its Interest Expense:

Interest Coverage = Operating Income / Interest Expense

The higher the ratio, the stronger the company’s financial strength is.

Formula

Interest Coverage = Operating Income / Interest Expense

Diageo PLC interest_coverage Calculation

* All numbers are in millions except for per share data

Diageo PLC Annual Data

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Diageo PLC Quarterly Data

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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
* All numbers are in millions except for per share data

Diageo PLC Annual Data

This information is for Premium Members Only.


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Jun03Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12
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Diageo PLC Quarterly Data

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Dec07Dec08Jun09Dec09Jun10Dec10Jun11Dec11Jun12Dec12
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