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Media General Inc (NYSE:MEG)
Interest Coverage
At Loss (As of Mar. 2016)

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. Media General Inc's Operating Income for the three months ended in Mar. 2016 was $-18 Mil. Media General Inc's Interest Expense for the three months ended in Mar. 2016 was $-29 Mil. Media General Inc did not have earnings to cover the interest expense. The higher the ratio, the stronger the company’s financial strength is.

Warning Sign:

Ben Graham prefers companies interest coverage is at least 5. Media General Incs earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.

MEG' s Interest Coverage Range Over the Past 10 Years
Min: 1.03   Max: 4.27
Current: 0.37

1.03
4.27
MEG's Interest Coverage is ranked lower than
99% of the 299 Companies
in the Global Broadcasting - TV industry.

( Industry Median: 17.09 vs. MEG: 0.37 )

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


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

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt is 0, then

The company had no debt.


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Media General Inc's Interest Coverage for the fiscal year that ended in Dec. 2014 is calculated as

Here, for the fiscal year that ended in Dec. 2014, Media General Inc's Interest Expense was $-46 Mil. Its Operating Income was $115 Mil. And its Long-Term Debt was $2,415 Mil.

Interest Coverage=-1*Operating Income (A: Dec. 2014 )/Interest Expense (A: Dec. 2014 )
=-1*115.104/-45.704
=2.52

Media General Inc's Interest Coverage for the quarter that ended in Mar. 2016 is calculated as

Here, for the three months ended in Mar. 2016, Media General Inc's Interest Expense was $-29 Mil. Its Operating Income was $-18 Mil. And its Long-Term Debt was $2,214 Mil.

Media General Inc did not have earnings to cover the interest expense.

* 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.

Media General Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
interest_coverage 2.921.80At LossAt Loss1.03At Loss1.112.672.520.69

Media General Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
interest_coverage At Loss1.932.293.582.370.671.26At Loss1.84At Loss
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