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Nike Inc (NYSE:NKE)
Interest Coverage
0.00 (As of Nov. 2014)

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. Nike Inc's Operating Income for the three months ended in Nov. 2014 was $889 Mil. Nike Inc's Interest Expense for the three months ended in Nov. 2014 was $0 Mil. Nike Inc's interest coverage for the quarter that ended in Nov. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

NKE' s 10-Year Interest Coverage Range
Min: 14.4   Max: 1027.67
Current: 0

14.4
1027.67

During the past 13 years, the highest interest coverage of Nike Inc was 1027.67. The lowest was 14.40. And the median was 25.54.

NKE's Interest Coverageis ranked lower than
119% of the 529 Companies
in the Global Footwear & Accessories industry.

( Industry Median: 128.82 vs. NKE: 0.00 )

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

Nike 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

Nike Inc had no debt.

Nike Inc's Interest Coverage for the fiscal year that ended in May. 2014 is calculated as

Here, for the fiscal year that ended in May. 2014, Nike Inc's Interest Expense was $0 Mil. Its Operating Income was $3,680 Mil. And its Long-Term Debt was $1,199 Mil.

Nike Inc had no debt.

Nike Inc's Interest Coverage for the quarter that ended in Nov. 2014 is calculated as

Here, for the three months ended in Nov. 2014, Nike Inc's Interest Expense was $0 Mil. Its Operating Income was $889 Mil. And its Long-Term Debt was $1,084 Mil.

Nike Inc had no debt.

* 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.

Nike Inc Annual Data

May05May06May07May08May09May10May11May12May13May14
interest_coverage 394.52At LossAt LossAt LossAt LossAt LossAt Loss1,027.67At LossAt Loss

Nike Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
interest_coverage At LossAt LossAt LossAt LossAt LossAt LossAt LossAt LossAt LossAt Loss
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