Universal (Universal) Interest Coverage

: 5.69 (As of Dec. 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. Universal's Operating Income for the three months ended in Dec. 2023 was $88 Mil. Universal's Interest Expense for the three months ended in Dec. 2023 was $-16 Mil. Universal's interest coverage for the quarter that ended in Dec. 2023 was 5.69. The higher the ratio, the stronger the company's financial strength is.

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

UVV' s Interest Coverage Range Over the Past 10 Years
Min: 3.27 Med: 8.89 Max: 11.53
Current: 3.27

UVV's Interest Coverage is ranked worse than
80.65% of 31 companies
in the Tobacco Products industry
Industry Median: 12.84 vs UVV: 3.27

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

Universal Interest Coverage Historical Data

The historical data trend for Universal'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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Universal Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

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10.36

6.74

6.66

6.06

3.67

Universal Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															5.43	3.27	0.71	3.40	5.69

Competitive Comparison

For the Tobacco subindustry, Universal'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.

Universal Interest Coverage Distribution

For the Tobacco Products industry and Consumer Defensive sector, Universal's Interest Coverage distribution charts can be found below:

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

Universal 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.

Universal'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, Universal's Interest Expense was $-49 Mil. Its Operating Income was $181 Mil. And its Long-Term Debt & Capital Lease Obligation was $642 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	181.072	/	-49.3
	=	3.67

Universal's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Universal's Interest Expense was $-16 Mil. Its Operating Income was $88 Mil. And its Long-Term Debt & Capital Lease Obligation was $639 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	88.388	/	-15.525
	=	5.69

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

Universal (NYSE:UVV) 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 .

Universal Interest Coverage Related Terms

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Universal (Universal) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Tobacco Products » Universal Corp (NYSE:UVV) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

UVV:Germany UVV:Germany

Address

9201 Forest Hill Avenue, Richmond, VA, USA, 23235

Website

http://www.universalcorp.com

Universal Corp is a global leaf tobacco supplier. The company procures leaf tobacco from farmers, processes it, and sells it to companies that manufacture consumer tobacco products. Universal does not manufacture or sell any consumer products itself. The company's segment includes Tobacco Operations and Ingredients Operations. It generates maximum revenue from the Tobacco Operations segment. Geographically, it derives a majority of revenue from the United States.

Executives

Candace C Formacek	officer: Vice President & Treasurer	PO BOX 25099, RICHMOND VA 23260
Robert C Sledd	director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Airton L Hentschke	officer: SVP & COO	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Lennart R. Freeman	director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Mckeen Starke	officer: Senior VP & Sales Director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Preston Douglas Wigner	officer: VP, General Counsel & Secy	9201 FOREST HILL AVENUE, PO BOX 25099, RICHMOND VA 23260
Schick Arthur J. Jr.	director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Theodore G Broome	other: Subsidiary Officer	PO BOX 25099, RICHMOND VA 23260
Thomas H Johnson	director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Diana F Cantor	director	9201 FOREST HILL AVENUE, RICHMOND VA 23235
Michael T Lawton	director	DOMINO'S PIZZA, 30 FRANK LLOYD WRIGHT DRIVE, ANN ARBOR MI 48106
Tullidge Thomas H Jr	director	PO BOX 25099, RICHMOND VA 23260
Jacqueline T. Williams	director	UNIVERSAL CORP., 9201 FOREST HILL AVENUE, RICHMOND VA 23235
Scott J Bleicher	officer: Vice President and Controller	PO BOX 25099, RICHMOND VA 23260
John Patrick O'keefe	other: Subsidiary Officer	9201 FOREST HILL AVENUE, RICHMOND VA 23235