ReadSoft AB (LTS:0GQO) Interest Coverage : 9.57 (As of Jun. 2014)

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What is ReadSoft AB 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. ReadSoft AB's Operating Income for the three months ended in Jun. 2014 was kr6.7 Mil. ReadSoft AB's Interest Expense for the three months ended in Jun. 2014 was kr-0.7 Mil. ReadSoft AB's interest coverage for the quarter that ended in Jun. 2014 was 9.57. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

ReadSoft AB has no debt.

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

LTS:0GQO' s Interest Coverage Range Over the Past 10 Years
Min: 2.39 Med: No Debt Max: 9999.99
Current: 5.65

LTS:0GQO's Interest Coverage is not ranked
in the Software industry.
Industry Median: 29.785 vs LTS:0GQO: 5.65

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

ReadSoft AB Interest Coverage Historical Data

The historical data trend for ReadSoft AB'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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ReadSoft AB Interest Coverage Chart

ReadSoft AB Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Interest Coverage

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4.89

28.88

N/A

27.74

3.59

ReadSoft AB Quarterly Data
	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14
Interest Coverage	Get a 7-Day Free Trial															2.71	-	17.27	-	9.57

Competitive Comparison of ReadSoft AB's Interest Coverage

For the Software - Application subindustry, ReadSoft AB'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.

ReadSoft AB's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, ReadSoft AB's Interest Coverage distribution charts can be found below:

* The bar in red indicates where ReadSoft AB's Interest Coverage falls into.

ReadSoft AB 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.

ReadSoft AB'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, ReadSoft AB's Interest Expense was kr-3.6 Mil. Its Operating Income was kr12.9 Mil. And its Long-Term Debt & Capital Lease Obligation was kr27.9 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2013 )	/	Interest Expense (A: Dec. 2013 )
	=	-1	*	12.93	/	-3.603
	=	3.59

ReadSoft AB's Interest Coverage for the quarter that ended in Jun. 2014 is calculated as

Here, for the three months ended in Jun. 2014, ReadSoft AB's Interest Expense was kr-0.7 Mil. Its Operating Income was kr6.7 Mil. And its Long-Term Debt & Capital Lease Obligation was kr0.0 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2014 )	/	Interest Expense (Q: Jun. 2014 )
	=	-1	*	6.7	/	-0.7
	=	9.57

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

ReadSoft AB (LTS:0GQO) 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 .

ReadSoft AB Interest Coverage Related Terms

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

ReadSoft AB (LTS:0GQO) Business Description

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Address

Website

ReadSoft AB is a Sweden-based company that creates and markets software and services for document automation, processes such as data entry, information verification, document workflows, and e-voicing. The company operates in over 16 countries worldwide, with partnerships in an additional 70. The company offers solutions primarily for industries such as banking, manufacturing, service bureaus, market research, insurance, government, and medical. Major customers include IKEA, Audi, Porsche, Yves Rocher, Swedish Tax, DaimlerChrysler, HSBS Bank, Avon, Bosch, London Underground, New York Transit, Toyota, Volvo, Monoprix, Ericsson, and ING. The company is headquartered in Helsingborg, Sweden. The company offers ReadSoft DOCUMENTS, a complete software platform for document automation. The product incorporates five Automation Areas: Capture, capturing the information in any format and making it ready for electronic processing; Understand, enabling the computer to read, sort, interpret, extract, and index documents electronically; Manage, providing customers with control of electronic documents, including the verification and quality control with archiving and monitoring capabilities; Integrate, integration with the business software; and Interchange, Electronic Data Interchange. Capabilities within each Automation Area are customized to the needs of the customer, and solutions can be expanded to include any required extra capabilities. Also, this software can be integrated with systems such as SAP and Oracle E-Business Suite, Intentia, and IFS. ReadSoft business solutions for specific areas include: ReadSoft Documents for Mailrooms, Documents for EDI, Documents for Invoices, and Documents for Forms. Additionally, the company offers Professional Services such as project management and customization, Solution Optimization, Training, and Technical Support.

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