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Peerless Systems Corporation (NAS:PRLS)
Interest Coverage
10,000.00 (As of Oct. 2013)

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. Peerless Systems Corporation's Operating Income for the three months ended in Oct. 2013 was $0.11 Mil. Peerless Systems Corporation's Interest Expense for the three months ended in Oct. 2013 was $0.00 Mil. Peerless Systems Corporation's interest coverage for the quarter that ended in Oct. 2013 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Peerless Systems Corporation has no debt.

PRLS' s 10-Year Interest Coverage Range
Min: 1086.75   Max: 9999.99
Current: No Debt

1086.75
9999.99

During the past 13 years, the highest interest coverage of Peerless Systems Corporation was 9999.99. The lowest was 1086.75. And the median was 10000.00.

PRLS's Interest Coverageis ranked higher than
70% of the 1525 Companies
in the Global Computer Distribution industry.

( Industry Median: 74.64 vs. PRLS: No Debt )

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

Peerless Systems Corporation 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

Peerless Systems Corporation had no debt.

Peerless Systems Corporation's Interest Coverage for the fiscal year that ended in Jan. 2013 is calculated as

Here, for the fiscal year that ended in Jan. 2013, Peerless Systems Corporation's Interest Expense was $0.00 Mil. Its Operating Income was $0.69 Mil. And its Long-Term Debt was $0.00 Mil.

Peerless Systems Corporation had no debt.

Peerless Systems Corporation's Interest Coverage for the quarter that ended in Oct. 2013 is calculated as

Here, for the three months ended in Oct. 2013, Peerless Systems Corporation's Interest Expense was $0.00 Mil. Its Operating Income was $0.11 Mil. And its Long-Term Debt was $0.00 Mil.

Peerless Systems Corporation 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.

Peerless Systems Corporation Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
interest_coverage No DebtNo Debt1,086.75No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt

Peerless Systems Corporation Quarterly Data

Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt
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