Smiths Group (Smiths Group) Interest Coverage

: 7.45 (As of Jan. 2024)

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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. Smiths Group's Operating Income for the six months ended in Jan. 2024 was $313 Mil. Smiths Group's Interest Expense for the six months ended in Jan. 2024 was $-42 Mil. Smiths Group's interest coverage for the quarter that ended in Jan. 2024 was 7.45. The higher the ratio, the stronger the company's financial strength is.

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

SMGKF' s Interest Coverage Range Over the Past 10 Years
Min: 2.76 Med: 5.41 Max: 8.56
Current: 6.15

SMGKF's Interest Coverage is ranked worse than
67.61% of 2306 companies
in the Industrial Products industry
Industry Median: 13.46 vs SMGKF: 6.15

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

Smiths Group Interest Coverage Historical Data

The historical data trend for Smiths Group'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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Smiths Group Annual Data

Trend

Jul14

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

Interest Coverage

5.50

4.50

6.14

2.76

5.29

Smiths Group Semi-Annual Data
	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24
Interest Coverage																7.88	-	5.48	5.10	7.45

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Smiths Group'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.

Smiths Group Interest Coverage Distribution

For the Industrial Products industry and Industrials sector, Smiths Group's Interest Coverage distribution charts can be found below:

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

Smiths Group 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.

Smiths Group's Interest Coverage for the fiscal year that ended in Jul. 2023 is calculated as

Here, for the fiscal year that ended in Jul. 2023, Smiths Group's Interest Expense was $-110 Mil. Its Operating Income was $580 Mil. And its Long-Term Debt & Capital Lease Obligation was $805 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jul. 2023 )	/	Interest Expense (A: Jul. 2023 )
	=	-1	*	579.897	/	-109.536
	=	5.29

Smiths Group's Interest Coverage for the quarter that ended in Jan. 2024 is calculated as

Here, for the six months ended in Jan. 2024, Smiths Group's Interest Expense was $-42 Mil. Its Operating Income was $313 Mil. And its Long-Term Debt & Capital Lease Obligation was $804 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jan. 2024 )	/	Interest Expense (Q: Jan. 2024 )
	=	-1	*	312.579	/	-41.931
	=	7.45

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

Smiths Group (OTCPK:SMGKF) 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 .

Smiths Group Interest Coverage Related Terms

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Smiths Group (Smiths Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Smiths Group PLC (OTCPK:SMGKF) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

SMGZY:USA SMINl:UK SMIN:UK QS2A:Germany

Address

11-12 St James’s Square, 4th Floor, London, GBR, SW1Y 4LB

Website

https://www.smiths.com

With its start as a London jeweler in the 19th century, Smiths Group has for most of its history operated as a company operating disparate but economically attractive businesses. Thematically, it runs businesses that manufacture niche products in security- or safety-sensitive industries. Today, the business is split across four divisions: mechanical seals, weapons detection, electrical connectors, and specialized hoses. The end customers for these products include airports, NASA, government security or defense departments, and hospitals.