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Liberty Media Corporation Interest Coverage: 10,000.0 ( as of Mar13)

* All numbers are in millions except for per share data LMCA 10-Y Financials »

Definition

Interest Coverage is a ratio that measures the burden of the debt a company carries and how easily the company can pay off its debt. It is calculated by dividing a company’s Operating Income (EBIT) by its Interest Expense:

Interest Coverage = Operating Income / Interest Expense

The higher the ratio, the stronger the company’s financial strength is.

Formula

Interest Coverage = Operating Income / Interest Expense

Liberty Media Corporation interest_coverage Calculation

* All numbers are in millions except for per share data

Liberty Media Corporation Annual Data

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Liberty Media Corporation Quarterly Data

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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
* All numbers are in millions except for per share data

Liberty Media Corporation Annual Data

This information is for Premium Members Only.


Take the full advantage of Gurus' investment ideas now.

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Dec10Dec11Dec12
interest_coveragePremium Member OnlyPremium Member OnlyPremium Member Only
Liberty Media Corporation Quarterly Data

This information is for Premium Members Only.


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7-Day Free Trial
Mar12Mar13
interest_coveragePremium Member OnlyPremium Member Only

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