Diversified Royalty (Diversified Royalty) Interest Coverage

: 2.77 (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. Diversified Royalty's Operating Income for the three months ended in Dec. 2023 was $10.81 Mil. Diversified Royalty's Interest Expense for the three months ended in Dec. 2023 was $-3.90 Mil. Diversified Royalty's interest coverage for the quarter that ended in Dec. 2023 was 2.77. 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. Diversified Royalty Corp interest coverage is 3.54, which is low.

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

BEVFF' s Interest Coverage Range Over the Past 10 Years
Min: 3.35 Med: 3.95 Max: 11.77
Current: 3.54

BEVFF's Interest Coverage is ranked worse than
60.61% of 396 companies
in the Conglomerates industry
Industry Median: 5.06 vs BEVFF: 3.54

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

Diversified Royalty Interest Coverage Historical Data

The historical data trend for Diversified Royalty'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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Diversified Royalty Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

3.80

3.35

3.95

4.13

3.54

Diversified Royalty Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																4.26	3.77	4.10	4.05	2.77

Competitive Comparison

For the Conglomerates subindustry, Diversified Royalty'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.

Diversified Royalty Interest Coverage Distribution

For the Conglomerates industry and Industrials sector, Diversified Royalty's Interest Coverage distribution charts can be found below:

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

Diversified Royalty 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.

Diversified Royalty'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, Diversified Royalty's Interest Expense was $-10.69 Mil. Its Operating Income was $37.81 Mil. And its Long-Term Debt & Capital Lease Obligation was $214.99 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	37.814	/	-10.686
	=	3.54

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

Here, for the three months ended in Dec. 2023, Diversified Royalty's Interest Expense was $-3.90 Mil. Its Operating Income was $10.81 Mil. And its Long-Term Debt & Capital Lease Obligation was $214.99 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	10.811	/	-3.899
	=	2.77

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

Diversified Royalty (OTCPK:BEVFF) 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 .

Diversified Royalty Interest Coverage Related Terms

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

Diversified Royalty (Diversified Royalty) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Conglomerates » Diversified Royalty Corp (OTCPK:BEVFF) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

BEW:Germany DIV:Canada

Address

609 Granville Street, Suite 330, P.O. Box 10033, Vancouver, BC, CAN, V7Y 1A1

Website

https://www.diversifiedroyaltycorp.com

Diversified Royalty Corp is a multi-royalty company. It is engaged in the business of acquiring royalties from multi-location businesses and franchisors in North America. As a part of the investment strategy, the firm always purchases trademarks of the companies it is going to acquire. The company gives its partners the benefit of full operational control of their business, participation in the growth of their company, and tax deductibility on royal payments. All of the company's operating revenues are earned from the receipt of royalties and management fees from its Royalty Partners.