Switch to:
KLA-Tencor Corp (NAS:KLAC)
Interest Coverage
14.12 (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. KLA-Tencor Corp's Operating Income for the three months ended in Dec. 2013 was $188 Mil. KLA-Tencor Corp's Interest Expense for the three months ended in Dec. 2013 was $-13 Mil. KLA-Tencor Corp's interest coverage for the quarter that ended in Dec. 2013 was 14.12. The higher the ratio, the stronger the company’s financial strength is.

KLAC' s 10-Year Interest Coverage Range
Min: 5.76   Max: 9999.99
Current: 13.47

5.76
9999.99

During the past 13 years, the highest interest coverage of KLA-Tencor Corp was 9999.99. The lowest was 5.76. And the median was 335.44.

KLAC's Interest Coverageis ranked lower than
52% of the 556 Companies
in the Global Semiconductor Equipment & Materials industry.

( Industry Median: 332.53 vs. KLAC: 13.47 )

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

KLA-Tencor 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

KLA-Tencor Corp had no debt.

KLA-Tencor Corp's Interest Coverage for the fiscal year that ended in Jun. 2013 is calculated as

Here, for the fiscal year that ended in Jun. 2013, KLA-Tencor Corp's Interest Expense was $-54 Mil. Its Operating Income was $730 Mil. And its Long-Term Debt was $747 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2013 )/Interest Expense (A: Jun. 2013 )
=-1*729.685/-54.176
=13.47

KLA-Tencor Corp's Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, KLA-Tencor Corp's Interest Expense was $-13 Mil. Its Operating Income was $188 Mil. And its Long-Term Debt was $748 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2013 )/Interest Expense (Q: Dec. 2013 )
=-1*187.982/-13.311
=14.12

* 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.

KLA-Tencor Corp Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
interest_coverage 469.42311.50142.43212.1146.38At Loss5.7621.3618.7513.47

KLA-Tencor Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage 18.3011.9921.0523.5713.8211.4115.0213.6210.9714.12
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