Dixons Retail (LSE:DXNS) Interest Coverage : 7.03 (As of Apr. 2014)

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What is Dixons Retail 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. Dixons Retail's Operating Income for the six months ended in Apr. 2014 was £140 Mil. Dixons Retail's Interest Expense for the six months ended in Apr. 2014 was £-20 Mil. Dixons Retail's interest coverage for the quarter that ended in Apr. 2014 was 7.03. The higher the ratio, the stronger the company's financial strength is.

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

LSE:DXNS' s Interest Coverage Range Over the Past 10 Years
Min: 2.97 Med: 7.61 Max: 11.93
Current: 4.71

LSE:DXNS's Interest Coverage is not ranked
in the Retail - Cyclical industry.
Industry Median: 7.825 vs LSE:DXNS: 4.71

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

Dixons Retail Interest Coverage Historical Data

The historical data trend for Dixons Retail'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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Dixons Retail Interest Coverage Chart

Dixons Retail Annual Data

Trend

Apr05

Apr06

Apr07

May08

Apr09

Apr10

Apr11

Apr12

Apr13

Apr14

Interest Coverage

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3.28

3.54

4.71

Dixons Retail Semi-Annual Data
	Oct07	Oct08	Apr09	Oct09	Apr10	Oct10	Apr11	Oct11	Apr12	Oct12	Apr13	Oct13	Apr14
Interest Coverage	Get a 7-Day Free Trial								-	1.30	6.37	2.43	7.03

Competitive Comparison of Dixons Retail's Interest Coverage

For the Specialty Retail subindustry, Dixons Retail'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.

Dixons Retail's Interest Coverage Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, Dixons Retail's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Dixons Retail's Interest Coverage falls into.

Dixons Retail 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.

Dixons Retail's Interest Coverage for the fiscal year that ended in Apr. 2014 is calculated as

Here, for the fiscal year that ended in Apr. 2014, Dixons Retail's Interest Expense was £-40 Mil. Its Operating Income was £189 Mil. And its Long-Term Debt & Capital Lease Obligation was £339 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Apr. 2014 )	/	Interest Expense (A: Apr. 2014 )
	=	-1	*	189.3	/	-40.2
	=	4.71

Dixons Retail's Interest Coverage for the quarter that ended in Apr. 2014 is calculated as

Here, for the six months ended in Apr. 2014, Dixons Retail's Interest Expense was £-20 Mil. Its Operating Income was £140 Mil. And its Long-Term Debt & Capital Lease Obligation was £339 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Apr. 2014 )	/	Interest Expense (Q: Apr. 2014 )
	=	-1	*	139.9	/	-19.9
	=	7.03

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

Dixons Retail (LSE:DXNS) 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 .

Dixons Retail Interest Coverage Related Terms

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

Dixons Retail (LSE:DXNS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Dixons Retail PLC (LSE:DXNS) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.dixonsretail.com

Dixons Retail PLC is an electrical retailer and service company which sell consumer electronics, personal computers, domestic appliances, photographic equipment, communication products and related services. The Group's reportable segments are; UK & Ireland comprises of electrical and computing retail chains as well as business to business activities. The division is engaged in multi-channel retail sales, associated peripherals and services and related financial and after sales services and also in business to business sales of computer hardware and software; Nordics operates in Norway, Sweden, Finland, Denmark, Iceland, Greenland and the Faroe Islands. The division engages in multi-channel retail sales and provided related product support services to its customers; Other International comprises operations in Italy, Greece, the Czech Republic, Slovakia, Turkey and the business to be closed in Spain which is excluded from underlying results. The Other International division engages in retail sales and provides related product support services to its customers in all of its markets; and Pure play e-commerce comprises pure play online retailers and operates in all of the countries in which the other divisions operate and across Europe.

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