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TJX Companies Inc (NYSE:TJX)
Interest Coverage
76.04 (As of Jan. 2015)

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. TJX Companies Inc's Operating Income for the three months ended in Jan. 2015 was $1,039 Mil. TJX Companies Inc's Interest Expense for the three months ended in Jan. 2015 was $-14 Mil. TJX Companies Inc's interest coverage for the quarter that ended in Jan. 2015 was 76.04. The higher the ratio, the stronger the company’s financial strength is.

TJX' s 10-Year Interest Coverage Range
Min: 4.24   Max: 415.12
Current: 65.12

4.24
415.12

During the past 13 years, the highest interest coverage of TJX Companies Inc was 415.12. The lowest was 4.24. And the median was 40.40.

TJX's Interest Coverageis ranked higher than
73% of the 972 Companies
in the Global Apparel Stores industry.

( Industry Median: 31.91 vs. TJX: 65.12 )

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

TJX Companies 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

TJX Companies Inc had no debt.

TJX Companies Inc's Interest Coverage for the fiscal year that ended in Jan. 2015 is calculated as

Here, for the fiscal year that ended in Jan. 2015, TJX Companies Inc's Interest Expense was $-55 Mil. Its Operating Income was $3,607 Mil. And its Long-Term Debt was $1,685 Mil.

Interest Coverage=-1*Operating Income (A: Jan. 2015 )/Interest Expense (A: Jan. 2015 )
=-1*3606.501/-55.38
=65.12

TJX Companies Inc's Interest Coverage for the quarter that ended in Jan. 2015 is calculated as

Here, for the three months ended in Jan. 2015, TJX Companies Inc's Interest Expense was $-14 Mil. Its Operating Income was $1,039 Mil. And its Long-Term Debt was $1,685 Mil.

Interest Coverage=-1*Operating Income (Q: Jan. 2015 )/Interest Expense (Q: Jan. 2015 )
=-1*1038.637/-13.659
=76.04

* 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.

TJX Companies Inc Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
interest_coverage 35.0382.22At Loss38.0640.4044.9552.4276.0872.6965.12

TJX Companies Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
interest_coverage 88.06112.8088.2666.0070.5070.9556.1457.7670.8976.04
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