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TransDigm Group Interest Coverage

: 2.38 (As of Mar. 2020)
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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. TransDigm Group's Operating Income for the three months ended in Mar. 2020 was USD 599 Mil. TransDigm Group's Interest Expense for the three months ended in Mar. 2020 was USD -252 Mil. TransDigm Group's interest coverage for the quarter that ended in Mar. 2020 was 2.38. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies interest coverage is at least 5. TransDigm Group Inc interest coverage is 2.28, which is low.

NYSE:TDG' s Interest Coverage Range Over the Past 10 Years
Min: 2.33   Med: 2.66   Max: 3.3
Current: 2.28

2.33
3.3

NYSE:TDG's Interest Coverage is ranked lower than
86% of the 168 Companies
in the Aerospace & Defense industry.

( Industry Median: 8.10 vs. NYSE:TDG: 2.28 )

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


TransDigm Group Interest Coverage 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.

TransDigm Group Annual Data
Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.61 2.67 2.46 2.51 2.33

TransDigm Group Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
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 2.42 2.00 2.45 2.28 2.38

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.


TransDigm Group Interest Coverage Distribution

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



TransDigm Group 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.


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

TransDigm Group's Interest Coverage for the fiscal year that ended in Sep. 2019 is calculated as

Here, for the fiscal year that ended in Sep. 2019, TransDigm Group's Interest Expense was USD -860 Mil. Its Operating Income was USD 2,004 Mil. And its Long-Term Debt & Capital Lease Obligation was USD 16,469 Mil.

Interest Coverage=-1* Operating Income (A: Sep. 2019 )/Interest Expense (A: Sep. 2019 )
=-1*2004.419/-859.753
=2.33

TransDigm Group's Interest Coverage for the quarter that ended in Mar. 2020 is calculated as

Here, for the three months ended in Mar. 2020, TransDigm Group's Interest Expense was USD -252 Mil. Its Operating Income was USD 599 Mil. And its Long-Term Debt & Capital Lease Obligation was USD 17,933 Mil.

Interest Coverage=-1* Operating Income (Q: Mar. 2020 )/Interest Expense (Q: Mar. 2020 )
=-1*599/-252
=2.38

* 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.


TransDigm Group  (NYSE:TDG) 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 .


TransDigm Group Interest Coverage Related Terms


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