GDS Holdings (FRA:G40) Interest Coverage : 0.28 (As of Dec. 2023)

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What is GDS Holdings 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. GDS Holdings's Operating Income for the three months ended in Dec. 2023 was €21 Mil. GDS Holdings's Interest Expense for the three months ended in Dec. 2023 was €-74 Mil. GDS Holdings's interest coverage for the quarter that ended in Dec. 2023 was 0.28. 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. GDS Holdings Ltds earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.

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

FRA:G40' s Interest Coverage Range Over the Past 10 Years
Min: 0.02 Med: 0.33 Max: 0.53
Current: 0.31

FRA:G40's Interest Coverage is ranked worse than
98.25% of 1602 companies
in the Software industry
Industry Median: 29.17 vs FRA:G40: 0.31

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

GDS Holdings Interest Coverage Historical Data

The historical data trend for GDS Holdings'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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GDS Holdings Interest Coverage Chart

GDS Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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0.51

0.53

0.40

0.35

0.31

GDS Holdings 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															0.47	0.32	0.52	0.16	0.28

Competitive Comparison of GDS Holdings's Interest Coverage

For the Information Technology Services subindustry, GDS Holdings'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.

GDS Holdings's Interest Coverage Distribution in the Software Industry

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

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

GDS Holdings 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.

GDS Holdings'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, GDS Holdings's Interest Expense was €-262 Mil. Its Operating Income was €82 Mil. And its Long-Term Debt & Capital Lease Obligation was €5,706 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	82.094	/	-261.605
	=	0.31

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

Here, for the three months ended in Dec. 2023, GDS Holdings's Interest Expense was €-74 Mil. Its Operating Income was €21 Mil. And its Long-Term Debt & Capital Lease Obligation was €5,706 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	20.515	/	-74.478
	=	0.28

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

GDS Holdings (FRA:G40) 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 .

GDS Holdings Interest Coverage Related Terms

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

GDS Holdings (FRA:G40) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » GDS Holdings Ltd (FRA:G40) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

GDS:USA GDS:Mexico 09698:Hong Kong G401:Germany G401:Germany G40:Germany G1DS34:Brazil

Address

No. 999 Zhouhai Road, F4/F5, Building C, Sunland International, Pudong, Shanghai, CHN, 200137

Website

https://www.gds-services.com

GDS Holdings started as an IT service provider in 2001 then moved to the data center business with its first self-developed data center opening in 2010. The company now develops and operates data centers in China and also builds, operates and transfers data centers for other clients. It offers colocation and managed services and mainly targets hyperscale cloud service customers who take large areas of its data centers or even whole data centers under long-term contracts. It has aggressively raised capital over the past four years for expansion. Its data centers are located predominantly in and around the Tier 1 cities in China and it has also started an expanding into Southeast Asia. GDS listed on the NASDAQ in 2016 and completed a secondary listing in Hong Kong in 2020.

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