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TAL Education Group (NYSE:XRS)
Interest Coverage
7.94 (As of Feb. 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. TAL Education Group's Operating Income for the three months ended in Feb. 2015 was $14.9 Mil. TAL Education Group's Interest Expense for the three months ended in Feb. 2015 was $-1.9 Mil. TAL Education Group's interest coverage for the quarter that ended in Feb. 2015 was 7.94. The higher the ratio, the stronger the company’s financial strength is.

XRS' s 10-Year Interest Coverage Range
Min: 11.57   Max: 9999.99
Current: 11.57

11.57
9999.99

During the past 7 years, the highest interest coverage of TAL Education Group was 9999.99. The lowest was 11.57. And the median was 430.95.

XRS's Interest Coverageis ranked lower than
78% of the 93 Companies
in the Global Education & Training Services industry.

( Industry Median: 188.50 vs. XRS: 11.57 )

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.

TAL Education Group's Interest Coverage for the fiscal year that ended in Feb. 2015 is calculated as

Here, for the fiscal year that ended in Feb. 2015, TAL Education Group's Interest Expense was $-5.8 Mil. Its Operating Income was $67.2 Mil. And its Long-Term Debt was $226.1 Mil.

Interest Coverage=-1*Operating Income (A: Feb. 2015 )/Interest Expense (A: Feb. 2015 )
=-1*67.248/-5.811
=11.57

TAL Education Group's Interest Coverage for the quarter that ended in Feb. 2015 is calculated as

Here, for the three months ended in Feb. 2015, TAL Education Group's Interest Expense was $-1.9 Mil. Its Operating Income was $14.9 Mil. And its Long-Term Debt was $226.1 Mil.

Interest Coverage=-1*Operating Income (Q: Feb. 2015 )/Interest Expense (Q: Feb. 2015 )
=-1*14.855/-1.872
=7.94

* 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.

TAL Education Group Annual Data

Feb09Feb10Feb11Feb12Feb13Feb14Feb15
interest_coverage At LossAt LossAt Loss210.77375.85430.95No DebtNo DebtNo Debt11.57

TAL Education Group Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
interest_coverage No DebtNo DebtNo DebtNo DebtNo Debt45.1116.174.707.9410.58
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