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Richardson Electronics Ltd  (NAS:RELL) Interest Coverage: No Debt (As of May. 2017)

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. Richardson Electronics Ltd's Operating Income for the three months ended in May. 2017 was USD 0.0 Mil. Richardson Electronics Ltd's Interest Expense for the three months ended in May. 2017 was USD 0.0 Mil. Richardson Electronics Ltd has no debt. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Richardson Electronics Ltd has no debt.

NAS:RELL' s Interest Coverage Range Over the Past 10 Years
Min: 20.18   Max: No Debt
Current: No Debt


NAS:RELL's Interest Coverage is ranked higher than
99% of the 1823 Companies
in the Global industry.

( Industry Median: 49.87 vs. NAS:RELL: 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.


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.

Richardson Electronics Ltd Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

Richardson Electronics Ltd Quarterly Data

Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17
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 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

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.


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.

Richardson Electronics Ltd's Interest Coverage for the fiscal year that ended in May. 2017 is calculated as

Here, for the fiscal year that ended in May. 2017, Richardson Electronics Ltd's Interest Expense was USD 0.0 Mil. Its Operating Income was USD -5.8 Mil. And its Long-Term Debt & Capital Lease Obligation was USD 0.0 Mil.

Richardson Electronics Ltd had no debt.

Richardson Electronics Ltd's Interest Coverage for the quarter that ended in May. 2017 is calculated as

Here, for the three months ended in May. 2017, Richardson Electronics Ltd's Interest Expense was USD 0.0 Mil. Its Operating Income was USD 0.0 Mil. And its Long-Term Debt & Capital Lease Obligation was USD 0.0 Mil.

Richardson Electronics Ltd had no debt.

* 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.


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 .


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