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Educational Development Corp (NAS:EDUC)
Interest Coverage
10,000.00 (As of Aug. 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. Educational Development Corp's Operating Income for the three months ended in Aug. 2014 was $0.02 Mil. Educational Development Corp's Interest Expense for the three months ended in Aug. 2014 was $0.00 Mil. Educational Development Corp's interest coverage for the quarter that ended in Aug. 2014 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

EDUC' s 10-Year Interest Coverage Range
Min: 9.67   Max: 9999.99
Current: No Debt

9.67
9999.99

During the past 13 years, the highest interest coverage of Educational Development Corp was 9999.99. The lowest was 9.67. And the median was 119.20.

EDUC's Interest Coverageis ranked higher than
96% of the 181 Companies
in the Global Publishing industry.

( Industry Median: 41.73 vs. EDUC: 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

Educational Development 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

Educational Development Corp had no debt.

Educational Development Corp's Interest Coverage for the fiscal year that ended in Feb. 2014 is calculated as

Here, for the fiscal year that ended in Feb. 2014, Educational Development Corp's Interest Expense was $0.00 Mil. Its Operating Income was $1.25 Mil. And its Long-Term Debt was $0.00 Mil.

Educational Development Corp had no debt.

Educational Development Corp's Interest Coverage for the quarter that ended in Aug. 2014 is calculated as

Here, for the three months ended in Aug. 2014, Educational Development Corp's Interest Expense was $0.00 Mil. Its Operating Income was $0.02 Mil. And its Long-Term Debt was $0.00 Mil.

Educational Development Corp 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.

Educational Development Corp Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
interest_coverage 56.7245.83437.38No DebtAt LossAt LossNo DebtNo DebtNo DebtNo Debt

Educational Development Corp Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt
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