CAE (TSX:CAE) Interest Coverage : 2.36 (As of Dec. 2023)

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What is CAE 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. CAE's Operating Income for the three months ended in Dec. 2023 was C$124 Mil. CAE's Interest Expense for the three months ended in Dec. 2023 was C$-52 Mil. CAE's interest coverage for the quarter that ended in Dec. 2023 was 2.36. The higher the ratio, the stronger the company's financial strength is.

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

TSX:CAE' s Interest Coverage Range Over the Past 10 Years
Min: 2.16 Med: 4.42 Max: 6.48
Current: 2.98

TSX:CAE's Interest Coverage is ranked worse than
75.46% of 216 companies
in the Aerospace & Defense industry
Industry Median: 7.04 vs TSX:CAE: 2.98

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

CAE Interest Coverage Historical Data

The historical data trend for CAE'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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CAE Interest Coverage Chart

CAE Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

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6.41

4.18

2.16

3.14

3.05

CAE 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															2.64	6.10	2.35	2.51	2.36

Competitive Comparison of CAE's Interest Coverage

For the Aerospace & Defense subindustry, CAE'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.

CAE's Interest Coverage Distribution in the Aerospace & Defense Industry

For the Aerospace & Defense industry and Industrials sector, CAE's Interest Coverage distribution charts can be found below:

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

CAE 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.

CAE's Interest Coverage for the fiscal year that ended in Mar. 2023 is calculated as

Here, for the fiscal year that ended in Mar. 2023, CAE's Interest Expense was C$-152 Mil. Its Operating Income was C$464 Mil. And its Long-Term Debt & Capital Lease Obligation was C$3,036 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	463.9	/	-152
	=	3.05

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

Here, for the three months ended in Dec. 2023, CAE's Interest Expense was C$-52 Mil. Its Operating Income was C$124 Mil. And its Long-Term Debt & Capital Lease Obligation was C$2,617 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	123.6	/	-52.4
	=	2.36

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

CAE (TSX:CAE) 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 .

CAE Interest Coverage Related Terms

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

CAE (TSX:CAE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » CAE Inc (TSX:CAE) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

CAE:USA CE9:Germany

Address

8585 Cote de Liesse, Saint-Laurent, QC, CAN, H4T 1G6

Website

https://www.cae.com

CAE Inc is a global company focused on delivering training for the civil aviation, defense, security, and healthcare markets. Multiple types of simulators and synthetic exercises may be sold to customers to serve as alternatives for live-training experiences. The company's training solutions are provided through products and services. CAE has many different training locations where clients can be trained and educated through a series of programs. Additionally, part of the revenues come from supplying aviation personnel on a lease, along with providing aviation support organizations. Roughly one-third of sales are from the United States, with the remainder split among several other nations.