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TRC Companies Inc (NYSE:TRR)
Interest Coverage
14.53 (As of Dec. 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. TRC Companies Inc's Operating Income for the three months ended in Dec. 2015 was $6.7 Mil. TRC Companies Inc's Interest Expense for the three months ended in Dec. 2015 was $-0.5 Mil. TRC Companies Inc's interest coverage for the quarter that ended in Dec. 2015 was 14.53. The higher the ratio, the stronger the company’s financial strength is.

TRR' s Interest Coverage Range Over the Past 10 Years
Min: 0.05   Max: 229.18
Current: 56.43

0.05
229.18
TRR's Interest Coverage is ranked higher than
72% of the 109 Companies
in the Global Waste Management industry.

( Industry Median: 10.75 vs. TRR: 56.43 )

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


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.


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

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

Here, for the fiscal year that ended in Jun. 2015, TRC Companies Inc's Interest Expense was $-0.1 Mil. Its Operating Income was $30.7 Mil. And its Long-Term Debt was $0.1 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2015 )/Interest Expense (A: Jun. 2015 )
=-1*30.71/-0.134
=229.18

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

Here, for the three months ended in Dec. 2015, TRC Companies Inc's Interest Expense was $-0.5 Mil. Its Operating Income was $6.7 Mil. And its Long-Term Debt was $96.6 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2015 )/Interest Expense (Q: Dec. 2015 )
=-1*6.698/-0.461
=14.53

* 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.

TRC Companies Inc Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
interest_coverage At Loss0.05At LossAt LossAt LossAt Loss44.8455.08123.79229.18

TRC Companies Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
interest_coverage 46.24136.71114.14527.12193.29326.9597.931,189.22274.0414.53
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