Cerence (Cerence) Interest Coverage

: 18.32 (As of Dec. 2023)

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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. Cerence's Operating Income for the three months ended in Dec. 2023 was $59.3 Mil. Cerence's Interest Expense for the three months ended in Dec. 2023 was $-3.2 Mil. Cerence's interest coverage for the quarter that ended in Dec. 2023 was 18.32. The higher the ratio, the stronger the company's financial strength is.

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

CRNC' s Interest Coverage Range Over the Past 10 Years
Min: 1.71 Med: No Debt Max: No Debt
Current: 2.88

CRNC's Interest Coverage is ranked worse than
86.39% of 1602 companies
in the Software industry
Industry Median: 29.54 vs CRNC: 2.88

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

Cerence Interest Coverage Historical Data

The historical data trend for Cerence'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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Cerence Annual Data

Trend

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Interest Coverage

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No Debt

1.71

4.69

2.66

Cerence Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															0.63	-	-	1.51	18.32

Competitive Comparison

For the Software - Application subindustry, Cerence'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.

Cerence Interest Coverage Distribution

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

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

Cerence 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.

Cerence's Interest Coverage for the fiscal year that ended in Sep. 2023 is calculated as

Here, for the fiscal year that ended in Sep. 2023, Cerence's Interest Expense was $-14.8 Mil. Its Operating Income was $-15.3 Mil. And its Long-Term Debt & Capital Lease Obligation was $283.9 Mil.

Cerence did not have earnings to cover the interest expense.

Cerence's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Cerence's Interest Expense was $-3.2 Mil. Its Operating Income was $59.3 Mil. And its Long-Term Debt & Capital Lease Obligation was $285.5 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	59.285	/	-3.236
	=	18.32

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

Cerence (NAS:CRNC) 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 .

Cerence Interest Coverage Related Terms

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

Cerence (Cerence) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Cerence Inc (NAS:CRNC) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

0S6:Germany

Address

1 Burlington Woods Drive, Suite 301A, Burlington, MA, USA, 01803

Website

https://www.cerence.com

Cerence Inc is a United States-based software company. It is involved in developing mobility-based solutions for drivers and their cars. The customers include all automobile original equipment manufacturers, or OEMs, or their tier 1 suppliers. The company's revenue is generated by selling software licenses and cloud-connected services. Geographically, it derives a majority of its revenue from the United States and also has a presence in Other Americas; Germany; Other Europe, the Middle East, Africa; Japan, and Other Asia-Pacific.

Executives

Stefan Ortmanns	officer: Executive Vice President	WALTER-SCHEIBLER-STR 24, MONSCHAU 2M 52156
Iqbal Arshad	officer: EVP, CTO	CERENCE INC., 1 BURLINGTON WOODS DRIVE, SUITE 301A, BURLINGTON MA 01803
Thomas L Beaudoin	director	NUANCE COMMUNICATIONS, INC., 1 WAYSIDE ROAD, BURLINGTON MA 01803
Marcy S Klevorn	director	ONE AMERICAN ROAD, DEARBORN MI 48126
Prateek Kathpal	officer: EVP & CTO	1 BURLINGTON WOODS DRIVE, BURLINGTON MA 01803
Christophe Couvreur	officer: SVP, Core BU	1 BURLINGTON WOODS DRIVE, BURLINGTON MA 01803
Douglas Lee Davis	director	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Marc Montagner	officer: Chief Financial Officer	C/O ENDURANCE INT'L GROUP HOLDINGS, INC., 10 CORPORATE DRIVE, SUITE 300, BURLINGTON MA 01803
Sanjay Dhawan	director, officer: Chief Executive Officer	C/O HARMAN INTERNATIONAL INDUSTRIES, INC, 400 ATLANTIC STREET, STAMFORD CT 06901
Leanne Fitzgerald	director, officer: Vice President and Secretary	1 WAYSIDE ROAD, BURLINGTON MA 01803
Mark J Gallenberger	officer: President	LTX-CREDENCE CORPORATION, 825 UNIVERSITY AVENUE, NORWOOD MA 02062
Alfred A Nietzel	director	ONE ADP BOULEVARD, ROSELAND NJ 07068
Kristi Ann Matus	director	C/O EQUITABLE HOLDINGS, INC., 1290 AVENUE OF THE AMERICAS, NEW YORK NY 10104
Marianne Budnik	director	C/O ACME PACKET, INC., 100 CROSBY DRIVE, BEDFORD MA 01730
Sanjay K Jha	director	15 WAYSIDE ROAD, BURLINGTON MA 01803