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Matrix Asset Management, Inc. (TSX:MTA)
Interest Coverage
At Loss (As of Sep. 2013)

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. Matrix Asset Management, Inc.'s Operating Income for the three months ended in Sep. 2013 was C\$-3.82 Mil. Matrix Asset Management, Inc.'s Interest Expense for the three months ended in Sep. 2013 was C\$-0.12 Mil. Matrix Asset Management, Inc. did not have earnings to cover the interest expense. The higher the ratio, the stronger the companys financial strength is.

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

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

Matrix Asset Management, Inc.'s Interest Coverage for the fiscal year that ended in Dec. 2012 is calculated as

Here, for the fiscal year that ended in Dec. 2012, Matrix Asset Management, Inc.'s Interest Expense was C\$-1.24 Mil. Its Operating Income was C\$-5.33 Mil. And its Long-Term Debt was C\$6.85 Mil.

 Matrix Asset Management, Inc. did not have earnings to cover the interest expense.

Matrix Asset Management, Inc.'s Interest Coverage for the quarter that ended in Sep. 2013 is calculated as

Here, for the three months ended in Sep. 2013, Matrix Asset Management, Inc.'s Interest Expense was C\$-0.12 Mil. Its Operating Income was C\$-3.82 Mil. And its Long-Term Debt was C\$4.45 Mil.

 Matrix Asset Management, Inc. did not have earnings to cover the interest expense.

* 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

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Matrix Asset Management, Inc. Annual Data

 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 interest_coverage No Debt No Debt No Debt No Debt No Debt No Debt At Loss At Loss At Loss At Loss

Matrix Asset Management, Inc. Quarterly Data

 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 interest_coverage At Loss At Loss At Loss At Loss At Loss At Loss At Loss At Loss At Loss At Loss
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