National Grid (National Grid) Interest Coverage

: 2.38 (As of Sep. 2023)

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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 by its Interest Expense. National Grid's Operating Income for the six months ended in Sep. 2023 was $2,457 Mil. National Grid's Interest Expense for the six months ended in Sep. 2023 was $-1,032 Mil. National Grid's interest coverage for the quarter that ended in Sep. 2023 was 2.38. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. National Grid PLC interest coverage is 2.71, which is low.

The historical rank and industry rank for National Grid's Interest Coverage or its related term are showing as below:

NGG' s Interest Coverage Range Over the Past 10 Years
Min: 2.28 Med: 3.44 Max: 5.76
Current: 2.71

NGG's Interest Coverage is ranked worse than
62.44% of 442 companies
in the Utilities - Regulated industry
Industry Median: 3.715 vs NGG: 2.71

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

National Grid Interest Coverage Historical Data

The historical data trend for National Grid's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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National Grid Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

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3.36

2.28

2.67

3.61

2.90

National Grid Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Interest Coverage	Get a 7-Day Free Trial															2.45	4.57	2.77	3.03	2.38

Competitive Comparison

For the Utilities - Regulated Electric subindustry, National Grid's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

National Grid Interest Coverage Distribution

For the Utilities - Regulated industry and Utilities sector, National Grid's Interest Coverage distribution charts can be found below:

* The bar in red indicates where National Grid's Interest Coverage falls into.

National Grid Interest Coverage Calculation

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 & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

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

National Grid's Interest Coverage for the fiscal year that ended in Mar. 2023 is calculated as

Here, for the fiscal year that ended in Mar. 2023, National Grid's Interest Expense was $-2,039 Mil. Its Operating Income was $5,921 Mil. And its Long-Term Debt & Capital Lease Obligation was $48,580 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	5921.117	/	-2038.835
	=	2.90

National Grid's Interest Coverage for the quarter that ended in Sep. 2023 is calculated as

Here, for the six months ended in Sep. 2023, National Grid's Interest Expense was $-1,032 Mil. Its Operating Income was $2,457 Mil. And its Long-Term Debt & Capital Lease Obligation was $52,111 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2023 )	/	Interest Expense (Q: Sep. 2023 )
	=	-1	*	2456.683	/	-1032.178
	=	2.38

The higher the ratio, the stronger the company's Financial Strength is.

National Grid (NYSE:NGG) Interest Coverage 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 .

National Grid Interest Coverage Related Terms

Thank you for viewing the detailed overview of National Grid's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

National Grid (National Grid) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » National Grid PLC (NYSE:NGG) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

NGGTF:USA NGl:UK NG.:UK NNGF:Germany NNGF:Germany NNGF:Germany NNGD:Germany N1GG34:Brazil NGG:Argentina

Address

1-3 Strand, London, GBR, WC2N 5EH

Website

https://www.nationalgrid.com

National Grid owns and operates the electric transmission system in England and Wales. It sold the bulk of its U.K. gas transmission business in fiscal 2023 to fund the acquisition of PPL's U.K. power distribution assets. In the Northeastern United States, it serves electricity and gas customers combined in three states. It also owns regulated transmission and electricity generation in the United States, metering services, merchant transmission lines in the U.K., and the Grain (U.K.) liquefied natural gas facility.