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OAO Gazprom (OTCPK:OGZPY)
Interest Coverage
34.89 (As of Sep. 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. OAO Gazprom's Operating Income for the three months ended in Sep. 2014 was $5,944 Mil. OAO Gazprom's Interest Expense for the three months ended in Sep. 2014 was $-170 Mil. OAO Gazprom's interest coverage for the quarter that ended in Sep. 2014 was 34.89. The higher the ratio, the stronger the company’s financial strength is.

OGZPY' s 10-Year Interest Coverage Range
Min: 9.12   Max: 51.78
Current: 37.11

9.12
51.78

During the past 8 years, the highest interest coverage of OAO Gazprom was 51.78. The lowest was 9.12. And the median was 24.91.

OGZPY's Interest Coverageis ranked higher than
93% of the 181 Companies
in the Global Oil & Gas Integrated industry.

( Industry Median: 14.41 vs. OGZPY: 37.11 )

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

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt is 0, then

The company had no debt.

OAO Gazprom's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as

Here, for the fiscal year that ended in Dec. 2013, OAO Gazprom's Interest Expense was $-708 Mil. Its Operating Income was $26,283 Mil. And its Long-Term Debt was $24,342 Mil.

Interest Coverage=-1*Operating Income (A: Dec. 2013 )/Interest Expense (A: Dec. 2013 )
=-1*26282.6461335/-708.196721311
=37.11

OAO Gazprom's Interest Coverage for the quarter that ended in Sep. 2014 is calculated as

Here, for the three months ended in Sep. 2014, OAO Gazprom's Interest Expense was $-170 Mil. Its Operating Income was $5,944 Mil. And its Long-Term Debt was $27,950 Mil.

Interest Coverage=-1*Operating Income (Q: Sep. 2014 )/Interest Expense (Q: Sep. 2014 )
=-1*5943.88143732/-170.342771982
=34.89

* 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.

OAO Gazprom Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
interest_coverage At LossAt Loss16.489.1221.0411.5528.7751.7836.4837.11

OAO Gazprom Quarterly Data

Dec11Jun12Sep12Dec12Mar13Sep13Dec13Mar14Sep14
interest_coverage At Loss44.862.0631.7741.7973.6029.7838.1941.1934.89
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