BT Group (LSE:BT.A) Interest Coverage : 3.09 (As of Sep. 2023)

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What is BT Group 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. BT Group's Operating Income for the six months ended in Sep. 2023 was £1,810 Mil. BT Group's Interest Expense for the six months ended in Sep. 2023 was £-586 Mil. BT Group's interest coverage for the quarter that ended in Sep. 2023 was 3.09. 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. BT Group PLC interest coverage is 3.23, which is low.

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

LSE:BT.A' s Interest Coverage Range Over the Past 10 Years
Min: 3.23 Med: 4.44 Max: 5.35
Current: 3.23

LSE:BT.A's Interest Coverage is ranked worse than
61.94% of 289 companies
in the Telecommunication Services industry
Industry Median: 4.59 vs LSE:BT.A: 3.23

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

BT Group Interest Coverage Historical Data

The historical data trend for BT Group'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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BT Group Interest Coverage Chart

BT Group Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

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5.10

4.26

4.34

3.86

3.61

BT Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Interest Coverage	Get a 7-Day Free Trial															3.77	3.96	3.87	3.40	3.09

Competitive Comparison of BT Group's Interest Coverage

For the Telecom Services subindustry, BT Group'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.

BT Group's Interest Coverage Distribution in the Telecommunication Services Industry

For the Telecommunication Services industry and Communication Services sector, BT Group's Interest Coverage distribution charts can be found below:

* The bar in red indicates where BT Group's Interest Coverage falls into.

BT Group 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.

BT Group's Interest Coverage for the fiscal year that ended in Mar. 2023 is calculated as

Here, for the fiscal year that ended in Mar. 2023, BT Group's Interest Expense was £-927 Mil. Its Operating Income was £3,346 Mil. And its Long-Term Debt & Capital Lease Obligation was £21,308 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	3346	/	-927
	=	3.61

BT Group's Interest Coverage for the quarter that ended in Sep. 2023 is calculated as

Here, for the six months ended in Sep. 2023, BT Group's Interest Expense was £-586 Mil. Its Operating Income was £1,810 Mil. And its Long-Term Debt & Capital Lease Obligation was £22,062 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2023 )	/	Interest Expense (Q: Sep. 2023 )
	=	-1	*	1810	/	-586
	=	3.09

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

BT Group (LSE:BT.A) 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 .

BT Group Interest Coverage Related Terms

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

BT Group (LSE:BT.A) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » BT Group PLC (LSE:BT.A) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

BTGOF:USA BTl:UK BTQ:Germany

Address

1 Braham Street, London, GBR, E1 8EE

Website

https://www.bt.com

BT Group is the incumbent telecommunications operator in the U.K. It is the owner of Openreach, the largest fixed-line network in the U.K. Openreach operates as a separate entity due to regulatory requirements but is still 100% owned by BT. Since 2020, Openreach has accelerated its fiber investments and expects to have 90% of the U.K. covered with FTTH by 2026. In the consumer division, BT has approximately 30% market share in broadband and mobile services. The enterprise segment serves large corporations while the global services division provides communications consultancy services.

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