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Guidewire Software Inc (NYSE:GWRE)
Interest Coverage
10,000.00 (As of Apr. 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. Guidewire Software Inc's Operating Income for the three months ended in Apr. 2014 was $-3.4 Mil. Guidewire Software Inc's Interest Expense for the three months ended in Apr. 2014 was $0.0 Mil. Guidewire Software Inc's interest coverage for the quarter that ended in Apr. 2014 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Guidewire Software Inc has no debt.

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

During the past 5 years, the highest interest coverage of Guidewire Software Inc was 9999.99. The lowest was 9999.99. And the median was 10000.00.

GWRE's Interest Coverageis ranked higher than
85% of the 1030 Companies
in the Global Software - Infrastructure industry.

( Industry Median: 704.34 vs. GWRE: 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

Guidewire Software Inc 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

Guidewire Software Inc had no debt.

Guidewire Software Inc's Interest Coverage for the fiscal year that ended in Jul. 2013 is calculated as

Here, for the fiscal year that ended in Jul. 2013, Guidewire Software Inc's Interest Expense was $0.0 Mil. Its Operating Income was $16.8 Mil. And its Long-Term Debt was $0.0 Mil.

Guidewire Software Inc had no debt.

Guidewire Software Inc's Interest Coverage for the quarter that ended in Apr. 2014 is calculated as

Here, for the three months ended in Apr. 2014, Guidewire Software Inc's Interest Expense was $0.0 Mil. Its Operating Income was $-3.4 Mil. And its Long-Term Debt was $0.0 Mil.

Guidewire Software 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.

Guidewire Software Inc Annual Data

Jul09Jul10Jul11Jul12Jul13
interest_coverage At LossAt LossAt LossAt LossAt LossNo DebtNo DebtNo DebtNo DebtNo Debt

Guidewire Software Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt
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