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Twin Disc Inc (NAS:TWIN)
Interest Coverage
0.00 (As of Mar. 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. Twin Disc Inc's Operating Income for the three months ended in Mar. 2014 was $-0.3 Mil. Twin Disc Inc's Interest Expense for the three months ended in Mar. 2014 was $-0.2 Mil. Twin Disc Inc's interest coverage for the quarter that ended in Mar. 2014 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

TWIN' s 10-Year Interest Coverage Range
Min: 1.35   Max: 30.42
Current: 6.98

1.35
30.42

During the past 13 years, the highest interest coverage of Twin Disc Inc was 30.42. The lowest was 1.35. And the median was 7.75.

TWIN's Interest Coverageis ranked lower than
52% of the 1122 Companies
in the Global Diversified Industrials industry.

( Industry Median: 27.24 vs. TWIN: 6.98 )

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

Twin Disc 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

Twin Disc Inc had no debt.

Twin Disc Inc's Interest Coverage for the fiscal year that ended in Jun. 2013 is calculated as

Here, for the fiscal year that ended in Jun. 2013, Twin Disc Inc's Interest Expense was $-1.4 Mil. Its Operating Income was $10.0 Mil. And its Long-Term Debt was $23.5 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2013 )/Interest Expense (A: Jun. 2013 )
=-1*10.013/-1.435
=6.98

Twin Disc Inc's Interest Coverage for the quarter that ended in Mar. 2014 is calculated as

Here, for the three months ended in Mar. 2014, Twin Disc Inc's Interest Expense was $-0.2 Mil. Its Operating Income was $-0.3 Mil. And its Long-Term Debt was $21.4 Mil.

Twin Disc 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

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.

Twin Disc Inc Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
interest_coverage 10.319.4214.4311.7312.807.961.3520.2030.426.98

Twin Disc Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
interest_coverage 24.8439.3615.149.1416.840.733.2415.976.09At Loss
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