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Constellation Brands Inc  (NYSE:STZ) Interest Coverage: 8.78 (As of Aug. 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. Constellation Brands Inc's Operating Income for the three months ended in Aug. 2017 was $714 Mil. Constellation Brands Inc's Interest Expense for the three months ended in Aug. 2017 was $-81 Mil. Constellation Brands Inc's interest coverage for the quarter that ended in Aug. 2017 was 8.78. The higher the ratio, the stronger the company's financial strength is.

NYSE:STZ' s Interest Coverage Range Over the Past 10 Years
Min: 0.09   Max: 7.91
Current: 7.91

0.09
7.91

NYSE:STZ's Interest Coverage is ranked lower than
67% of the 189 Companies
in the Global industry.

( Industry Median: 16.33 vs. NYSE:STZ: 7.91 )

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.

Constellation Brands Inc Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.30 7.54 4.44 5.62 7.20

Constellation Brands Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 6.49 6.88 9.11 6.89 8.78

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.

Constellation Brands Inc's Interest Coverage for the fiscal year that ended in Feb. 2017 is calculated as

Here, for the fiscal year that ended in Feb. 2017, Constellation Brands Inc's Interest Expense was $-333 Mil. Its Operating Income was $2,399 Mil. And its Long-Term Debt & Capital Lease Obligation was $7,721 Mil.

Interest Coverage=-1*Operating Income (A: Feb. 2017 )/Interest Expense (A: Feb. 2017 )
=-1*2399.4/-333.3
=7.20

Constellation Brands Inc's Interest Coverage for the quarter that ended in Aug. 2017 is calculated as

Here, for the three months ended in Aug. 2017, Constellation Brands Inc's Interest Expense was $-81 Mil. Its Operating Income was $714 Mil. And its Long-Term Debt & Capital Lease Obligation was $8,037 Mil.

Interest Coverage=-1*Operating Income (Q: Aug. 2017 )/Interest Expense (Q: Aug. 2017 )
=-1*713.9/-81.3
=8.78

* 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 .


Related Terms


Headlines

From the Internet

STZ
Constellation Brands Like Company Valuation

- Seekingalpha 2017-10-16 13:39:17

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