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Australia and New Zealand Banking Group Ltd  (OTCPK:ANZBY) Interest Coverage: 0.55 (As of Sep. 2016)

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. Australia and New Zealand Banking Group Ltd's Operating Income for the six months ended in Sep. 2016 was $6,210 Mil. Australia and New Zealand Banking Group Ltd's Interest Expense for the six months ended in Sep. 2016 was $-11,280 Mil. Australia and New Zealand Banking Group Ltd's interest coverage for the quarter that ended in Sep. 2016 was 0.55. The higher the ratio, the stronger the company's financial strength is.

OTCPK:ANZBY' s Interest Coverage Range Over the Past 10 Years
Min: 0.18   Max: 0.68
Current: 0.68

0.18
0.68

OTCPK:ANZBY's Interest Coverage is ranked lower than
78% of the 1562 Companies
in the Global industry.

( Industry Median: 1.72 vs. OTCPK:ANZBY: 0.68 )

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Australia and New Zealand Banking Group Ltd Annual Data

Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.57 0.66 0.66 0.55 0.68

Australia and New Zealand Banking Group Ltd Semi-Annual Data

Sep98 Sep99 Sep00 Sep01 Sep02 Sep03 Sep04 Sep05 Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.57 0.66 0.66 0.55 0.68

Competitive Comparison
* 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.


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.


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

Australia and New Zealand Banking Group Ltd's Interest Coverage for the fiscal year that ended in Sep. 2017 is calculated as

Here, for the fiscal year that ended in Sep. 2017, Australia and New Zealand Banking Group Ltd's Interest Expense was $-11,293 Mil. Its Operating Income was $7,677 Mil. And its Long-Term Debt & Capital Lease Obligation was $14,123 Mil.

Interest Coverage=-1*Operating Income (A: Sep. 2017 )/Interest Expense (A: Sep. 2017 )
=-1*7677.03349282/-11293.460925
=0.68

Australia and New Zealand Banking Group Ltd's Interest Coverage for the quarter that ended in Sep. 2016 is calculated as

Here, for the six months ended in Sep. 2016, Australia and New Zealand Banking Group Ltd's Interest Expense was $-11,280 Mil. Its Operating Income was $6,210 Mil. And its Long-Term Debt & Capital Lease Obligation was $16,677 Mil.

Interest Coverage=-1*Operating Income (Q: Sep. 2016 )/Interest Expense (Q: Sep. 2016 )
=-1*6209.56719818/-11280.1822323
=0.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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


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 .


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