Switch to:
Harbinger Group, Inc. (NYSE:HRG)
Interest Coverage
2.13 (As of Dec. 2013)

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. Harbinger Group, Inc.'s Operating Income for the three months ended in Dec. 2013 was $179 Mil. Harbinger Group, Inc.'s Interest Expense for the three months ended in Dec. 2013 was $-84 Mil. Harbinger Group, Inc.'s interest coverage for the quarter that ended in Dec. 2013 was 2.13. The higher the ratio, the stronger the company’s financial strength is.

HRG' s 10-Year Interest Coverage Range
Min: 0.66   Max: 9999.99
Current: 1.44

0.66
9999.99

During the past 13 years, the highest interest coverage of Harbinger Group, Inc. was 9999.99. The lowest was 0.66. And the median was 19.88.

HRG's Interest Coverageis ranked lower than
63% of the 382 Companies
in the Global Conglomerates industry.

( Industry Median: 22.37 vs. HRG: 1.44 )

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

Harbinger Group, 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

Harbinger Group, Inc. had no debt.

Harbinger Group, Inc.'s Interest Coverage for the fiscal year that ended in Sep. 2013 is calculated as

Here, for the fiscal year that ended in Sep. 2013, Harbinger Group, Inc.'s Interest Expense was $-512 Mil. Its Operating Income was $737 Mil. And its Long-Term Debt was $4,896 Mil.

Interest Coverage=-1*Operating Income (A: Sep. 2013 )/Interest Expense (A: Sep. 2013 )
=-1*737.4/-511.9
=1.44

Harbinger Group, Inc.'s Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, Harbinger Group, Inc.'s Interest Expense was $-84 Mil. Its Operating Income was $179 Mil. And its Long-Term Debt was $5,166 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2013 )/Interest Expense (Q: Dec. 2013 )
=-1*179.3/-84
=2.13

* 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.

Harbinger Group, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Sep11Sep12Sep13
interest_coverage At LossNo DebtNo DebtNo DebtNo DebtNo DebtAt Loss0.661.631.44

Harbinger Group, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage At Loss2.001.141.502.131.511.772.180.982.13
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide