Switch to:
NASB Financial Inc (NAS:NASB)
Interest Coverage
1.99 (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. NASB Financial Inc's Operating Income for the three months ended in Dec. 2013 was $3.1 Mil. NASB Financial Inc's Interest Expense for the three months ended in Dec. 2013 was $-1.5 Mil. NASB Financial Inc's interest coverage for the quarter that ended in Dec. 2013 was 1.99. The higher the ratio, the stronger the company’s financial strength is.

NASB' s 10-Year Interest Coverage Range
Min: 0.25   Max: 5.7
Current: 5.7

0.25
5.7

During the past 13 years, the highest interest coverage of NASB Financial Inc was 5.70. The lowest was 0.25. And the median was 0.65.

NASB's Interest Coverageis ranked higher than
94% of the 1350 Companies
in the Global Savings & Cooperative Banks industry.

( Industry Median: 1.10 vs. NASB: 5.70 )

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

NASB Financial 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

NASB Financial Inc had no debt.

NASB Financial 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, NASB Financial Inc's Interest Expense was $-7.9 Mil. Its Operating Income was $44.9 Mil. And its Long-Term Debt was $180.8 Mil.

Interest Coverage=-1*Operating Income (A: Sep. 2013 )/Interest Expense (A: Sep. 2013 )
=-1*44.921/-7.876
=5.70

NASB Financial Inc's Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, NASB Financial Inc's Interest Expense was $-1.5 Mil. Its Operating Income was $3.1 Mil. And its Long-Term Debt was $235.8 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2013 )/Interest Expense (Q: Dec. 2013 )
=-1*3.07/-1.545
=1.99

* 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.

NASB Financial Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
interest_coverage 1.981.250.630.400.250.710.32At Loss2.435.70

NASB Financial Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage 2.692.630.202.714.625.618.861.596.521.99
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