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Vulcan Materials Company (NYSE:VMC)
Interest Coverage
0.00 (As of Dec. 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. Vulcan Materials Company's Operating Income for the three months ended in Dec. 2013 was $99 Mil. Vulcan Materials Company's Interest Expense for the three months ended in Dec. 2013 was $0 Mil. Vulcan Materials Company's interest coverage for the quarter that ended in Dec. 2013 was 0.00. The higher the ratio, the stronger the company’s financial strength is.

VMC' s 10-Year Interest Coverage Range
Min: 0.29   Max: 50.47
Current: 0.94

0.29
50.47

During the past 13 years, the highest interest coverage of Vulcan Materials Company was 50.47. The lowest was 0.29. And the median was 7.46.

VMC's Interest Coverageis ranked lower than
64% of the 420 Companies
in the Global Building Materials industry.

( Industry Median: 12.69 vs. VMC: 0.94 )

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

Vulcan Materials Company 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

Vulcan Materials Company had no debt.

Vulcan Materials Company's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as

Here, for the fiscal year that ended in Dec. 2013, Vulcan Materials Company's Interest Expense was $-203 Mil. Its Operating Income was $190 Mil. And its Long-Term Debt was $2,522 Mil.

Interest Coverage=-1*Operating Income (A: Dec. 2013 )/Interest Expense (A: Dec. 2013 )
=-1*190.404/-202.588
=0.94

Vulcan Materials Company's Interest Coverage for the quarter that ended in Dec. 2013 is calculated as

Here, for the three months ended in Dec. 2013, Vulcan Materials Company's Interest Expense was $0 Mil. Its Operating Income was $99 Mil. And its Long-Term Debt was $2,522 Mil.

Vulcan Materials Company had no debt.

* 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.

Vulcan Materials Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
interest_coverage 14.4712.8426.4214.821.440.85At Loss0.290.400.94

Vulcan Materials Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
interest_coverage 2.10At LossAt Loss0.37At LossAt LossAt Loss1.71At LossAt Loss
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