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Sycamore Networks Inc  (OTCPK:SCMR) Interest Coverage: No Debt (As of Jan. 2013)

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. Sycamore Networks Inc's Operating Income for the three months ended in Jan. 2013 was $-4.04 Mil. Sycamore Networks Inc's Interest Expense for the three months ended in Jan. 2013 was $0.00 Mil. Sycamore Networks Inc has no debt. The higher the ratio, the stronger the company's financial strength is.


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.

Sycamore Networks Inc Annual Data

Jul03 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12
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

Sycamore Networks Inc Quarterly Data

Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10 Apr10 Jul10 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13
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.

Sycamore Networks Inc's Interest Coverage for the fiscal year that ended in Jul. 2012 is calculated as

Here, for the fiscal year that ended in Jul. 2012, Sycamore Networks Inc's Interest Expense was $0.00 Mil. Its Operating Income was $-13.96 Mil. And its Long-Term Debt & Capital Lease Obligation was $0.00 Mil.

Sycamore Networks Inc had no debt.

Sycamore Networks Inc's Interest Coverage for the quarter that ended in Jan. 2013 is calculated as

Here, for the three months ended in Jan. 2013, Sycamore Networks Inc's Interest Expense was $0.00 Mil. Its Operating Income was $-4.04 Mil. And its Long-Term Debt & Capital Lease Obligation was $0.00 Mil.

Sycamore Networks Inc 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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