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Qualcomm Inc (NAS:QCOM)
Interest Coverage
10,000.00 (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. Qualcomm Inc's Operating Income for the three months ended in Sep. 2014 was $1,992 Mil. Qualcomm Inc's Interest Expense for the three months ended in Sep. 2014 was $0 Mil. Qualcomm Inc's interest coverage for the quarter that ended in Sep. 2014 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

Good Sign:

Qualcomm Inc has no debt.

QCOM' s 10-Year Interest Coverage Range
Min: 0.68   Max: 9999.99
Current: No Debt

0.68
9999.99

During the past 13 years, the highest interest coverage of Qualcomm Inc was 9999.99. The lowest was 0.68. And the median was 158.17.

QCOM's Interest Coverageis ranked higher than
97% of the 430 Companies
in the Global Communication Equipment industry.

( Industry Median: 115.57 vs. QCOM: 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

Qualcomm 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

Qualcomm Inc had no debt.

Qualcomm Inc's Interest Coverage for the fiscal year that ended in Sep. 2014 is calculated as

Here, for the fiscal year that ended in Sep. 2014, Qualcomm Inc's Interest Expense was $0 Mil. Its Operating Income was $7,550 Mil. And its Long-Term Debt was $0 Mil.

Qualcomm Inc had no debt.

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

Here, for the three months ended in Sep. 2014, Qualcomm Inc's Interest Expense was $0 Mil. Its Operating Income was $1,992 Mil. And its Long-Term Debt was $0 Mil.

Qualcomm 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.

Qualcomm Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
interest_coverage 795.33672.50262.09169.5592.7586.6744.0963.13314.35No Debt

Qualcomm Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
interest_coverage 76.7877.13261.00268.14239.571,588.00497.67663.33No DebtNo Debt
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