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Sycamore Networks Inc (OTCPK:SCMR)
Interest Coverage
10,000.00 (As of Jan. 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. Sycamore Networks Inc's Operating Income for the three months ended in Jan. 2013 was $-4.04 Mil. Sycamore Networks Inc's Interest Expense for the three months ended in Jan. 2013 was $0.00 Mil. Sycamore Networks Inc's interest coverage for the quarter that ended in Jan. 2013 was 10,000.00. The higher the ratio, the stronger the company’s financial strength is.

SCMR' s 10-Year Interest Coverage Range
Min: 0   Max: 0
Current: 0

SCMR's Interest Coverageis ranked lower than
130% of the 382 Companies
in the Global Communication Equipment industry.

( Industry Median: 130.28 vs. SCMR: 0.00 )

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

Sycamore Networks 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

Sycamore Networks Inc had no debt.

Sycamore Networks Inc's Interest Coverage for the fiscal year that ended in Jul. 2012 is calculated as

Here, for the fiscal year that ended in Jul. 2012, Sycamore Networks Inc's Interest Expense was $0.00 Mil. Its Operating Income was $-13.96 Mil. And its Long-Term Debt was $0.00 Mil.

Sycamore Networks Inc had no debt.

Sycamore Networks Inc's Interest Coverage for the quarter that ended in Jan. 2013 is calculated as

Here, for the three months ended in Jan. 2013, Sycamore Networks Inc's Interest Expense was $0.00 Mil. Its Operating Income was $-4.04 Mil. And its Long-Term Debt was $0.00 Mil.

Sycamore Networks 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.

Sycamore Networks Inc Annual Data

Jul03Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtAt LossAt LossNo DebtNo Debt

Sycamore Networks Inc Quarterly Data

Oct10Jan11Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13
interest_coverage No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt
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