China Airlines (TPE:2610) Interest Coverage : 6.00 (As of Mar. 2024)

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What is China Airlines 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. China Airlines's Operating Income for the three months ended in Mar. 2024 was NT$3,852 Mil. China Airlines's Interest Expense for the three months ended in Mar. 2024 was NT$-642 Mil. China Airlines's interest coverage for the quarter that ended in Mar. 2024 was 6.00. 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. China Airlines Ltd interest coverage is 4.78, which is low.

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

TPE:2610' s Interest Coverage Range Over the Past 10 Years
Min: 0.71 Med: 3.22 Max: 6.55
Current: 4.78

TPE:2610's Interest Coverage is ranked worse than
54.12% of 813 companies
in the Transportation industry
Industry Median: 5.37 vs TPE:2610: 4.78

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

China Airlines Interest Coverage Historical Data

The historical data trend for China Airlines'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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China Airlines Interest Coverage Chart

China Airlines Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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0.80

0.71

6.22

1.02

3.89

China Airlines Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Interest Coverage	Get a 7-Day Free Trial															2.61	7.09	3.90	1.81	6.00

Competitive Comparison of China Airlines's Interest Coverage

For the Airlines subindustry, China Airlines'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.

China Airlines's Interest Coverage Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, China Airlines's Interest Coverage distribution charts can be found below:

* The bar in red indicates where China Airlines's Interest Coverage falls into.

China Airlines 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.

China Airlines's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, China Airlines's Interest Expense was NT$-2,608 Mil. Its Operating Income was NT$10,157 Mil. And its Long-Term Debt & Capital Lease Obligation was NT$67,187 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	10157.421	/	-2608.298
	=	3.89

China Airlines's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, China Airlines's Interest Expense was NT$-642 Mil. Its Operating Income was NT$3,852 Mil. And its Long-Term Debt & Capital Lease Obligation was NT$63,555 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	3852.307	/	-641.766
	=	6.00

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

China Airlines (TPE:2610) 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 .

China Airlines Interest Coverage Related Terms

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

China Airlines (TPE:2610) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » China Airlines Ltd (TPE:2610) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 1, Hangzhan South Road, Dayuan District, Taoyuan, TWN

Website

https://www.china-airlines.com

China Airlines Ltd provides air transportation services. The company is composed of its flight and non-flight segments. The flight segment is the core business of the firm and offers transport services primarily for passengers and cargo. A vast proportion of the company's revenue is generated from transporting passengers in its flight operating unit. The non-flight segment provides various services such as mail and ground solutions, data processing services to other airlines, aircraft maintenance, and aircraft leasing. It engages in air transportation services for passengers, cargo and others. The company's geographical segments include America, Northeast Asia, Southeast Asia, Europe, Australia, China, and Domestic.

China Airlines (TPE:2610) Headlines

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