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BHP Billiton Ltd  (NYSE:BHP) Interest Coverage: 11.99 (As of Dec. 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. BHP Billiton Ltd's Operating Income for the six months ended in Dec. 2016 was $6,057 Mil. BHP Billiton Ltd's Interest Expense for the six months ended in Dec. 2016 was $-505 Mil. BHP Billiton Ltd's interest coverage for the quarter that ended in Dec. 2016 was 11.99. The higher the ratio, the stronger the company's financial strength is.

NYSE:BHP' s Interest Coverage Range Over the Past 10 Years
Min: 11.55   Max: 129.33
Current: 11.55

11.55
129.33

NYSE:BHP's Interest Coverage is ranked lower than
81% of the 1004 Companies
in the Global industry.

( Industry Median: 10000.00 vs. NYSE:BHP: 11.55 )

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.

BHP Billiton Ltd Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 31.85 46.60 22.94 0.00 11.55

BHP Billiton Ltd Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
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 3.56 0.00 1.70 11.99 11.10

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.

BHP Billiton Ltd's Interest Coverage for the fiscal year that ended in Jun. 2017 is calculated as

Here, for the fiscal year that ended in Jun. 2017, BHP Billiton Ltd's Interest Expense was $-1,018 Mil. Its Operating Income was $11,753 Mil. And its Long-Term Debt & Capital Lease Obligation was $29,233 Mil.

Interest Coverage=-1*Operating Income (A: Jun. 2017 )/Interest Expense (A: Jun. 2017 )
=-1*11753/-1018
=11.55

BHP Billiton Ltd's Interest Coverage for the quarter that ended in Dec. 2016 is calculated as

Here, for the six months ended in Dec. 2016, BHP Billiton Ltd's Interest Expense was $-505 Mil. Its Operating Income was $6,057 Mil. And its Long-Term Debt & Capital Lease Obligation was $30,670 Mil.

Interest Coverage=-1*Operating Income (Q: Dec. 2016 )/Interest Expense (Q: Dec. 2016 )
=-1*6057/-505
=11.99

* 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 .


Related Terms


Headlines

From the Internet

BHP
Cobalt Miners News Month September 2017

- Seekingalpha 2017-09-25 07:17:18

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