BAE Systems (BAE Systems) Interest Coverage

: 5.13 (As of Dec. 2023)

View and export this data going back to . Start your Free Trial

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. BAE Systems's Operating Income for the six months ended in Dec. 2023 was $1,447 Mil. BAE Systems's Interest Expense for the six months ended in Dec. 2023 was $-282 Mil. BAE Systems's interest coverage for the quarter that ended in Dec. 2023 was 5.13. The higher the ratio, the stronger the company's financial strength is.

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

BAESY' s Interest Coverage Range Over the Past 10 Years
Min: 3.39 Med: 4.9 Max: 6.91
Current: 6.83

BAESY's Interest Coverage is ranked worse than
50.93% of 216 companies
in the Aerospace & Defense industry
Industry Median: 7.04 vs BAESY: 6.83

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

BAE Systems Interest Coverage Historical Data

The historical data trend for BAE Systems'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.

* Premium members only.

BAE Systems Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

4.96

5.63

6.05

6.91

6.83

BAE Systems Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage																3.70	7.21	6.67	10.11	5.13

Competitive Comparison

For the Aerospace & Defense subindustry, BAE Systems'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.

BAE Systems Interest Coverage Distribution

For the Aerospace & Defense industry and Industrials sector, BAE Systems's Interest Coverage distribution charts can be found below:

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

BAE Systems 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.

BAE Systems's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, BAE Systems's Interest Expense was $-429 Mil. Its Operating Income was $2,932 Mil. And its Long-Term Debt & Capital Lease Obligation was $7,222 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	2931.646	/	-429.114
	=	6.83

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

Here, for the six months ended in Dec. 2023, BAE Systems's Interest Expense was $-282 Mil. Its Operating Income was $1,447 Mil. And its Long-Term Debt & Capital Lease Obligation was $7,222 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	1446.835	/	-282.278
	=	5.13

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

BAE Systems (OTCPK:BAESY) 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 .

BAE Systems Interest Coverage Related Terms

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

BAE Systems (BAE Systems) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » BAE Systems PLC (OTCPK:BAESY) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

BAESF:USA BAl:UK BA.:UK BSP:Germany

Address

6 Carlton Gardens, Stirling Square, London, GBR, SW1Y 5AD

Website

https://www.baesystems.com

BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the U.S. Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's U.S.- and U.K.-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the U.S. government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the U.S. Defense Department; the air segment includes BAE's share of U.S. and European air programs as well as its businesses in Saudi Arabia and Australia; and the maritime segment comprises U.K. land- and marine-based activities.