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Total SA (NYSE:TOT)
Interest Coverage
16.03 (As of Jun. 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. Total SA's Operating Income for the three months ended in Jun. 2015 was $3,702 Mil. Total SA's Interest Expense for the three months ended in Jun. 2015 was $-231 Mil. Total SA's interest coverage for the quarter that ended in Jun. 2015 was 16.03. The higher the ratio, the stronger the company’s financial strength is.

TOT' s 10-Year Interest Coverage Range
Min: 3.54   Max: 54.98
Current: 12.13

3.54
54.98

During the past 13 years, the highest interest coverage of Total SA was 54.98. The lowest was 3.54. And the median was 17.71.

TOT's Interest Coverageis ranked lower than
53% of the 38 Companies
in the Global Oil & Gas Integrated industry.

( Industry Median: 14.41 vs. TOT: 12.13 )

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

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt is 0, then

The company had no debt.

Total SA's Interest Coverage for the fiscal year that ended in Dec. 2014 is calculated as

Here, for the fiscal year that ended in Dec. 2014, Total SA's Interest Expense was $-748 Mil. Its Operating Income was $9,074 Mil. And its Long-Term Debt was $45,481 Mil.

Interest Coverage=-1*Operating Income (A: Dec. 2014 )/Interest Expense (A: Dec. 2014 )
=-1*9074/-748
=12.13

Total SA's Interest Coverage for the quarter that ended in Jun. 2015 is calculated as

Here, for the three months ended in Jun. 2015, Total SA's Interest Expense was $-231 Mil. Its Operating Income was $3,702 Mil. And its Long-Term Debt was $43,363 Mil.

Interest Coverage=-1*Operating Income (Q: Jun. 2015 )/Interest Expense (Q: Jun. 2015 )
=-1*3702/-231
=16.03

* 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.

Total SA Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
interest_coverage 44.2113.9412.4017.7416.9622.2335.0532.5826.8212.13

Total SA Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
interest_coverage 33.0523.6926.6925.6428.8320.2129.79At Loss9.4516.03
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