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Pier 1 Imports, Inc. (NYSE:PIR)
Interest Coverage
0.00 (As of Feb. 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. Pier 1 Imports, Inc.'s Operating Income for the three months ended in Feb. 2014 was $70 Mil. Pier 1 Imports, Inc.'s Interest Expense for the three months ended in Feb. 2014 was $0 Mil. Pier 1 Imports, Inc.'s interest coverage for the quarter that ended in Feb. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Ben Graham prefers companies interest coverage is at least 5. Pier 1 Imports, Inc. has enough cash to cover all of its debt. Its financial situation is stable.

PIR' s 10-Year Interest Coverage Range
Min: 4.95   Max: 267.81
Current: 267.81

4.95
267.81

During the past 13 years, the highest interest coverage of Pier 1 Imports, Inc. was 267.81. The lowest was 4.95. And the median was 48.41.

PIR's Interest Coverageis ranked higher than
80% of the 771 Companies
in the Global Home Improvement Stores industry.

( Industry Median: 34.17 vs. PIR: 267.81 )

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

Pier 1 Imports, 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

Pier 1 Imports, Inc. had no debt.

Pier 1 Imports, Inc.'s Interest Coverage for the fiscal year that ended in Feb. 2014 is calculated as

Here, for the fiscal year that ended in Feb. 2014, Pier 1 Imports, Inc.'s Interest Expense was $-3 Mil. Its Operating Income was $176 Mil. And its Long-Term Debt was $10 Mil.

Interest Coverage=-1*Operating Income (A: Feb. 2014 )/Interest Expense (A: Feb. 2014 )
=-1*175.5/-2.572
=68.23

Pier 1 Imports, Inc.'s Interest Coverage for the quarter that ended in Feb. 2014 is calculated as

Here, for the three months ended in Feb. 2014, Pier 1 Imports, Inc.'s Interest Expense was $0 Mil. Its Operating Income was $70 Mil. And its Long-Term Debt was $10 Mil.

Pier 1 Imports, Inc. had no debt.

* 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.

Pier 1 Imports, Inc. Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
interest_coverage 56.63At LossAt LossAt LossAt LossAt Loss19.3350.13267.8168.23

Pier 1 Imports, Inc. Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
interest_coverage 44.4896.8733.68At LossAt LossAt Loss44.35At Loss81.62At Loss
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