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Radiant Logistics, Inc. (AMEX:RLGT)
Interest Coverage
4.35 (As of Dec. 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. Radiant Logistics, Inc.'s Operating Income for the three months ended in Dec. 2013 was $2.2 Mil. Radiant Logistics, Inc.'s Interest Expense for the three months ended in Dec. 2013 was $-0.5 Mil. Radiant Logistics, Inc.'s interest coverage for the quarter that ended in Dec. 2013 was 4.35. The higher the ratio, the stronger the company’s financial strength is.

RLGT' s 10-Year Interest Coverage Range
Min: 3.53   Max: 22.6
Current: 3.68

3.53
22.6

During the past 9 years, the highest interest coverage of Radiant Logistics, Inc. was 22.60. The lowest was 3.53. And the median was 9.20.

RLGT's Interest Coverageis ranked higher than
62% of the 640 Companies
in the Global Integrated Shipping & Logistics industry.

( Industry Median: 5.52 vs. RLGT: 3.68 )

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

Radiant Logistics, 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

Radiant Logistics, Inc. had no debt.

Radiant Logistics, Inc.'s Interest Coverage for the fiscal year that ended in Jun. 2013 is calculated as

Here, for the fiscal year that ended in Jun. 2013, Radiant Logistics, Inc.'s Interest Expense was $-2.0 Mil. Its Operating Income was $7.4 Mil. And its Long-Term Debt was $17.7 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2013 )/Interest Expense (A: Jun. 2013 )
=-1*7.422/-2.016
=3.68

Radiant Logistics, Inc.'s Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, Radiant Logistics, Inc.'s Interest Expense was $-0.5 Mil. Its Operating Income was $2.2 Mil. And its Long-Term Debt was $9.1 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2013 )/Interest Expense (Q: Dec. 2013 )
=-1*2.153/-0.495
=4.35

* 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.

Radiant Logistics, Inc. Annual Data

Dec04Dec05Jun07Jun08Jun09Jun10Jun11Jun12Jun13
interest_coverage At LossAt LossAt Loss18.774.55At Loss13.8422.603.533.68

Radiant Logistics, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage 12.165.240.633.982.25At Loss5.167.814.214.35
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