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New York & Company, Inc. (NYSE:NWY)
Interest Coverage
71.50 (As of Jan. 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. New York & Company, Inc.'s Operating Income for the three months ended in Jan. 2014 was $7.2 Mil. New York & Company, Inc.'s Interest Expense for the three months ended in Jan. 2014 was $-0.1 Mil. New York & Company, Inc.'s interest coverage for the quarter that ended in Jan. 2014 was 71.50. The higher the ratio, the stronger the company’s financial strength is.

NWY' s 10-Year Interest Coverage Range
Min: 5.17   Max: 46.98
Current: 5.97

5.17
46.98

During the past 11 years, the highest interest coverage of New York & Company, Inc. was 46.98. The lowest was 5.17. And the median was 13.05.

NWY's Interest Coverageis ranked lower than
51% of the 776 Companies
in the Global Apparel Stores industry.

( Industry Median: 34.17 vs. NWY: 5.97 )

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

New York & Company, 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

New York & Company, Inc. had no debt.

New York & Company, Inc.'s Interest Coverage for the fiscal year that ended in Jan. 2014 is calculated as

Here, for the fiscal year that ended in Jan. 2014, New York & Company, Inc.'s Interest Expense was $-0.4 Mil. Its Operating Income was $3.1 Mil. And its Long-Term Debt was $0.0 Mil.

Interest Coverage=-1*Operating Income (A: Jan. 2014 )/Interest Expense (A: Jan. 2014 )
=-1*3.077/-0.377
=8.16

New York & Company, Inc.'s Interest Coverage for the quarter that ended in Jan. 2014 is calculated as

Here, for the three months ended in Jan. 2014, New York & Company, Inc.'s Interest Expense was $-0.1 Mil. Its Operating Income was $7.2 Mil. And its Long-Term Debt was $0.0 Mil.

Interest Coverage=-1*Operating Income (Q: Jan. 2014 )/Interest Expense (Q: Jan. 2014 )
=-1*7.222/-0.101
=71.50

* 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.

New York & Company, Inc. Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
interest_coverage 7.9318.1746.9837.40At LossAt LossAt LossAt Loss5.978.16

New York & Company, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
interest_coverage At LossAt LossAt LossAt LossAt Loss100.4813.37At LossAt Loss71.50
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