Japan Tobacco (TSE:2914) Interest Coverage : 1.96 (As of Dec. 2023)

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What is Japan Tobacco Interest Coverage?

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. Japan Tobacco's Operating Income for the three months ended in Dec. 2023 was 円39,046 Mil. Japan Tobacco's Interest Expense for the three months ended in Dec. 2023 was 円-19,930 Mil. Japan Tobacco's interest coverage for the quarter that ended in Dec. 2023 was 1.96. The higher the ratio, the stronger the company's financial strength is.

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

TSE:2914' s Interest Coverage Range Over the Past 10 Years
Min: 6.97 Med: 12.61 Max: 36.93
Current: 6.97

TSE:2914's Interest Coverage is ranked worse than
70.97% of 31 companies
in the Tobacco Products industry
Industry Median: 12.84 vs TSE:2914: 6.97

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

Japan Tobacco Interest Coverage Historical Data

The historical data trend for Japan Tobacco'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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Japan Tobacco Interest Coverage Chart

Japan Tobacco Annual Data

Trend

Mar14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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10.92

7.58

10.85

7.07

6.97

Japan Tobacco Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															2.44	6.67	7.77	11.83	1.96

Competitive Comparison of Japan Tobacco's Interest Coverage

For the Tobacco subindustry, Japan Tobacco'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.

Japan Tobacco's Interest Coverage Distribution in the Tobacco Products Industry

For the Tobacco Products industry and Consumer Defensive sector, Japan Tobacco's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Japan Tobacco's Interest Coverage falls into.

Japan Tobacco 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.

Japan Tobacco'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, Japan Tobacco's Interest Expense was 円-95,222 Mil. Its Operating Income was 円664,078 Mil. And its Long-Term Debt & Capital Lease Obligation was 円908,926 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	664078	/	-95222
	=	6.97

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

Here, for the three months ended in Dec. 2023, Japan Tobacco's Interest Expense was 円-19,930 Mil. Its Operating Income was 円39,046 Mil. And its Long-Term Debt & Capital Lease Obligation was 円908,926 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	39046	/	-19930
	=	1.96

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

Japan Tobacco (TSE:2914) 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 .

Japan Tobacco Interest Coverage Related Terms

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

Japan Tobacco (TSE:2914) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Tobacco Products » Japan Tobacco Inc (TSE:2914) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

JAPAY:USA JAPAF:USA JAT:Germany

Address

2-1, Toranomon 2-chome, Minato-ku, Tokyo, JPN, 105-8422

Website

http://www.jt.com

Japan Tobacco is the third-largest tobacco company globally. It owns a rich brand portfolio including Winston (non-U.S.), Camel (non-U.S.), and Mevius, and holds leading shares in many core markets including Japan, Russia, and the U.K. It has added Logic as a vaping brand and Ploom heated tobacco lines into its reduced-risk-product portfolio. The tobacco business contributes 90% of group sales and nearly all profits, with more than half generated by the overseas tobacco operations. JTI was created through the acquisition of R.J. Reynolds' non-U.S. operations in 1999 and further expanded through multiple acquisitions, of which the purchase of Gallaher in 2007 was the most notable, doubling JTI's sales. Pharmaceutical and processed food operations are the other businesses.

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