Energy Action (ASX:EAX) Interest Coverage : 2.11 (As of Dec. 2023)

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What is Energy Action Interest Coverage?

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 by its Interest Expense. Energy Action's Operating Income for the six months ended in Dec. 2023 was A$0.81 Mil. Energy Action's Interest Expense for the six months ended in Dec. 2023 was A$-0.39 Mil. Energy Action's interest coverage for the quarter that ended in Dec. 2023 was 2.11. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Energy Action Ltd interest coverage is 1.79, which is low.

The historical rank and industry rank for Energy Action's Interest Coverage or its related term are showing as below:

ASX:EAX' s Interest Coverage Range Over the Past 10 Years
Min: 0.81 Med: 7.17 Max: No Debt
Current: 1.79

ASX:EAX's Interest Coverage is ranked worse than
89.32% of 796 companies
in the Business Services industry
Industry Median: 13.57 vs ASX:EAX: 1.79

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

Energy Action Interest Coverage Historical Data

The historical data trend for Energy Action's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Energy Action Interest Coverage Chart

Energy Action Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Interest Coverage

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2.99

2.17

0.81

Energy Action Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial															-	-	0.11	1.43	2.11

Competitive Comparison of Energy Action's Interest Coverage

For the Specialty Business Services subindustry, Energy Action's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Energy Action's Interest Coverage Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Energy Action's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Energy Action's Interest Coverage falls into.

Energy Action Interest Coverage Calculation

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 & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

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

Energy Action's Interest Coverage for the fiscal year that ended in Jun. 2023 is calculated as

Here, for the fiscal year that ended in Jun. 2023, Energy Action's Interest Expense was A$-0.64 Mil. Its Operating Income was A$0.52 Mil. And its Long-Term Debt & Capital Lease Obligation was A$4.47 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2023 )	/	Interest Expense (A: Jun. 2023 )
	=	-1	*	0.517	/	-0.639
	=	0.81

Energy Action's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, Energy Action's Interest Expense was A$-0.39 Mil. Its Operating Income was A$0.81 Mil. And its Long-Term Debt & Capital Lease Obligation was A$1.99 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	0.813	/	-0.385
	=	2.11

The higher the ratio, the stronger the company's Financial Strength is.

Energy Action (ASX:EAX) Interest Coverage 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 .

Energy Action Interest Coverage Related Terms

Thank you for viewing the detailed overview of Energy Action's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Energy Action (ASX:EAX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Energy Action Ltd (ASX:EAX) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

56 Station Street, Level 5, Parramatta, NSW, AUS, 2150

Website

https://www.energyaction.com.au

Energy Action Ltd is engaged in providing integrated energy management services to a diverse base of commercial, industrial and small and medium-sized business customers. It offers electricity and gas procurement services in Australia. The company's core services include Procurement; Managed Services; Retail Services and Other. The company has one operating segment, which provides electricity and gas procurement services, energy management, and retail billing services in Australia. The company provides various services such as Energy Buying, Energy Management, Embedded Networks. It derives a majority of its revenues from Energy Management.

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