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Tiffany & Co (NYSE:TIF)
Interest Coverage
0.00 (As of Jul. 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. Tiffany & Co's Operating Income for the three months ended in Jul. 2014 was $209 Mil. Tiffany & Co's Interest Expense for the three months ended in Jul. 2014 was $0 Mil. Tiffany & Co's interest coverage for the quarter that ended in Jul. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

TIF' s 10-Year Interest Coverage Range
Min: 4.86   Max: 23.85
Current: 4.86

4.86
23.85

During the past 13 years, the highest interest coverage of Tiffany & Co was 23.85. The lowest was 4.86. And the median was 14.58.

TIF's Interest Coverageis ranked higher than
52% of the 882 Companies
in the Global Luxury Goods industry.

( Industry Median: 32.14 vs. TIF: 4.86 )

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

Tiffany & Co 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

Tiffany & Co had no debt.

Tiffany & Co's Interest Coverage for the fiscal year that ended in Jan. 2014 is calculated as

Here, for the fiscal year that ended in Jan. 2014, Tiffany & Co's Interest Expense was $-63 Mil. Its Operating Income was $304 Mil. And its Long-Term Debt was $751 Mil.

Interest Coverage=-1*Operating Income (A: Jan. 2014 )/Interest Expense (A: Jan. 2014 )
=-1*304.329/-62.654
=4.86

Tiffany & Co's Interest Coverage for the quarter that ended in Jul. 2014 is calculated as

Here, for the three months ended in Jul. 2014, Tiffany & Co's Interest Expense was $0 Mil. Its Operating Income was $209 Mil. And its Long-Term Debt was $750 Mil.

Tiffany & Co 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.

Tiffany & Co Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
interest_coverage 13.3916.5915.9321.4512.938.0010.9514.5811.804.86

Tiffany & Co Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
interest_coverage 12.7910.857.9314.90At LossAt LossAt LossAt LossAt LossAt Loss
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