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Constellation Brands Inc (NYSE:STZ)
Interest Coverage
0.00 (As of Aug. 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. Constellation Brands Inc's Operating Income for the three months ended in Aug. 2014 was $379 Mil. Constellation Brands Inc's Interest Expense for the three months ended in Aug. 2014 was $0 Mil. Constellation Brands Inc's interest coverage for the quarter that ended in Aug. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

STZ' s 10-Year Interest Coverage Range
Min: 0.07   Max: 7.37
Current: 7.37

0.07
7.37

During the past 13 years, the highest interest coverage of Constellation Brands Inc was 7.37. The lowest was 0.07. And the median was 2.60.

STZ's Interest Coverageis ranked higher than
70% of the 184 Companies
in the Global Beverages - Wineries & Distilleries industry.

( Industry Median: 7.37 vs. STZ: 7.37 )

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

Constellation Brands 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

Constellation Brands Inc had no debt.

Constellation Brands Inc's Interest Coverage for the fiscal year that ended in Feb. 2014 is calculated as

Here, for the fiscal year that ended in Feb. 2014, Constellation Brands Inc's Interest Expense was $-331 Mil. Its Operating Income was $2,438 Mil. And its Long-Term Debt was $6,373 Mil.

Interest Coverage=-1*Operating Income (A: Feb. 2014 )/Interest Expense (A: Feb. 2014 )
=-1*2437.7/-330.9
=7.37

Constellation Brands Inc's Interest Coverage for the quarter that ended in Aug. 2014 is calculated as

Here, for the three months ended in Aug. 2014, Constellation Brands Inc's Interest Expense was $0 Mil. Its Operating Income was $379 Mil. And its Long-Term Debt was $6,323 Mil.

Constellation Brands 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.

Constellation Brands Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
interest_coverage 4.123.512.60At Loss0.071.182.572.592.247.37

Constellation Brands Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
interest_coverage 2.042.392.591.901.2918.143.973.65At LossAt Loss
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