Arconic (Arconic) Interest Coverage : 5.04 (As of Jun. 2023)

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What is Arconic 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. Arconic's Operating Income for the three months ended in Jun. 2023 was $126 Mil. Arconic's Interest Expense for the three months ended in Jun. 2023 was $-25 Mil. Arconic's interest coverage for the quarter that ended in Jun. 2023 was 5.04. The higher the ratio, the stronger the company's financial strength is.

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

ARNC' s Interest Coverage Range Over the Past 10 Years
Min: 1.58 Med: 2.63 Max: 3.97
Current: 3.47

ARNC's Interest Coverage is not ranked
in the Industrial Products industry.
Industry Median: 13.58 vs ARNC: 3.47

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

Arconic Interest Coverage Historical Data

The historical data trend for Arconic'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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Arconic Interest Coverage Chart

Arconic Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Interest Coverage

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2.26

2.63

2.27

3.97

3.93

Arconic Quarterly Data
	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23
Interest Coverage	Get a 7-Day Free Trial															5.62	2.81	3.31	2.84	5.04

Competitive Comparison of Arconic's Interest Coverage

For the Metal Fabrication subindustry, Arconic'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.

Arconic's Interest Coverage Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Arconic's Interest Coverage distribution charts can be found below:

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

Arconic 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.

Arconic's Interest Coverage for the fiscal year that ended in Dec. 2022 is calculated as

Here, for the fiscal year that ended in Dec. 2022, Arconic's Interest Expense was $-104 Mil. Its Operating Income was $409 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,680 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2022 )	/	Interest Expense (A: Dec. 2022 )
	=	-1	*	409	/	-104
	=	3.93

Arconic's Interest Coverage for the quarter that ended in Jun. 2023 is calculated as

Here, for the three months ended in Jun. 2023, Arconic's Interest Expense was $-25 Mil. Its Operating Income was $126 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,676 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2023 )	/	Interest Expense (Q: Jun. 2023 )
	=	-1	*	126	/	-25
	=	5.04

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

Arconic (NYSE:ARNC) 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 .

Arconic Interest Coverage Related Terms

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

Arconic (Arconic) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Arconic Corp (NYSE:ARNC) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

201 Isabella Street, Pittsburgh, PA, USA, 15212-5872

Website

https://www.arconic.com

Arconic Corp is engaged in the manufacturing of aluminum sheets, plates, extrusions, and architectural products, serving the ground transportation, aerospace, building and construction, industrial, and packaging end-markets. The firm's operating segments include Rolled Products, Extrusions, and Building and Construction Systems (BCS). It generates a majority of its revenue from the Rolled Products segment which is used in the production of finished goods ranging from automotive body panels and airframes to industrial plate and brazing sheets. It sells the products globally and derives key revenue from the U.S.

Executives

William F. Austen	director	222 SOUTH 9TH STREET, SUITE 2300, MINNEAPOLIS MN 55402-4099
Ellis Allen Jones	director	1835 DUEBER AVE. SW, CANTON OH 44706
Diana B. Perreiah	officer: Executive Vice President	201 ISABELLA STREET, PITTSBURGH PA 15212
Melissa M Miller	officer: Executive Vice President	201 ISABELLA STREET, PITTSBURGH PA 15212
Robert L. Woodall	officer: Executive Vice President	201 ISABELLA STREET, PITTSBURGH PA 15212
Carol S Eicher	director	ROHM AND HAAS COMPANY, 100 INDEPENDENCE MALL WEST, PHILADELPHIA PA 19106
Jacques M Croisetiere	director	C/O MORTON INTERNATIONAL INC, 100 N RIVERSIDE PLZ, CHICAGO IL 60606
Jeffrey Stafeil	director	1707 PADDINGTON CIRCLE, KESWICK VA 22947
Margaret S Billson	director	2503 CLARK CARR LOOP SE, ALBUQUERQUE NM 87106
Christopher L Ayers	director	5626 MISSION DRIVE, MISSION HILL KS 66208
Elmer L Doty	director
Daniel G Fayock	officer: EVP & Chief Legal Officer	201 ISABELLA STREET, PITTSBURGH PA 15212
E Stanley Oneal	director	MERRILL LYNCH CORPORATE SECRETARY, 222 BROADWAY, 17TH FLOOR, NEW YORK NY 10038
Mark J Vrablec	officer: EVP	201 ISABELLA STREET, PITTSBURGH PA 15212
Mary Zik	officer: Vice President and Controller	201 ISABELLA STREET, SUITE 200, PITTSBURGH PA 15212-5872