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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 companys Operating Income (EBIT) by its Interest Expense. Rio Tinto PLC's Operating Income for the six months ended in Jun. 2014 was $5,583 Mil. Rio Tinto PLC's Interest Expense for the six months ended in Jun. 2014 was $-367 Mil. Rio Tinto PLC's interest coverage for the quarter that ended in Jun. 2014 was 15.21. The higher the ratio, the stronger the companys financial strength is.
During the past 13 years, the highest interest coverage of Rio Tinto PLC was 56.09. The lowest was 2.71. And the median was 9.50.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a companys Operating Income (EBIT) by its Interest Expense:
|Rio Tinto PLC did not have earnings to cover the interest expense.|
|Rio Tinto PLC had no debt.|
Rio Tinto PLC's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as
|Interest Coverage||=||-1||*||Operating Income (A: Dec. 2013 )||/||Interest Expense (A: Dec. 2013 )|
Rio Tinto PLC's Interest Coverage for the quarter that ended in Jun. 2014 is calculated as
|Interest Coverage||=||-1||*||Operating Income (Q: Jun. 2014 )||/||Interest Expense (Q: Jun. 2014 )|
* 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 companys financial strength is.
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 companys overage financial strength.
Rio Tinto PLC Annual Data
Rio Tinto PLC Semi-Annual Data
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