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Demand Media Inc (NYSE:DMD)
Interest Coverage
No Debt (As of Mar. 2015)

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. Demand Media Inc's Operating Income for the three months ended in Mar. 2015 was $-9.7 Mil. Demand Media Inc's Interest Expense for the three months ended in Mar. 2015 was $0.0 Mil. Demand Media Inc has no debt. The higher the ratio, the stronger the company’s financial strength is.

DMD' s 10-Year Interest Coverage Range
Min: 13.91   Max: 13.91
Current: 0

During the past 7 years, the highest interest coverage of Demand Media Inc was 13.91. The lowest was 13.91. And the median was 13.91.

DMD's Interest Coverageis ranked lower than
170% of the 229 Companies
in the Global Internet Content & Information industry.

( Industry Median: 10000.00 vs. DMD: 0.00 )

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.

Demand Media Inc's Interest Coverage for the fiscal year that ended in Dec. 2014 is calculated as

Here, for the fiscal year that ended in Dec. 2014, Demand Media Inc's Interest Expense was $-4.7 Mil. Its Operating Income was $-267.2 Mil. And its Long-Term Debt was $0.0 Mil.

Demand Media Inc did not have earnings to cover the interest expense.

Demand Media Inc's Interest Coverage for the quarter that ended in Mar. 2015 is calculated as

Here, for the three months ended in Mar. 2015, Demand Media Inc's Interest Expense was $0.0 Mil. Its Operating Income was $-9.7 Mil. And its Long-Term Debt was $0.0 Mil.

Demand Media 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.

Demand Media Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
interest_coverage At LossAt LossAt LossAt LossAt LossAt LossAt Loss13.91At LossAt Loss

Demand Media Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
interest_coverage 38.888.27At LossAt LossAt LossAt LossAt LossAt LossAt LossNo Debt
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