GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » ARM Holdings PLC (NAS:ARM) » Definitions » Interest Coverage

ARM Holdings (ARM Holdings) Interest Coverage : N/A (As of Mar. 2024)


View and export this data going back to 2023. Start your Free Trial

What is ARM Holdings 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. ARM Holdings's Operating Income for the three months ended in Mar. 2024 was $22 Mil. ARM Holdings's Interest Expense for the three months ended in Mar. 2024 was $0 Mil. GuruFocus does not calculate 's interest coverage with the available data. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. ARM Holdings PLC has enough cash to cover all of its debt. Its financial situation is stable.

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


ARM's Interest Coverage is not ranked *
in the Semiconductors industry.
Industry Median: 20.52
* Ranked among companies with meaningful Interest Coverage only.

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

ARM Holdings Interest Coverage Historical Data

The historical data trend for ARM Holdings'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.

* Premium members only.

ARM Holdings Interest Coverage Chart

ARM Holdings Annual Data
Trend Mar21 Mar22 Mar23 Mar24
Interest Coverage
No Debt N/A N/A N/A

ARM Holdings Quarterly Data
Mar21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Interest Coverage Get a 7-Day Free Trial Premium Member Only Premium Member Only N/A N/A N/A N/A N/A

Competitive Comparison of ARM Holdings's Interest Coverage

For the Semiconductors subindustry, ARM Holdings'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.

ARM Holdings's Interest Coverage Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, ARM Holdings's Interest Coverage distribution charts can be found below:

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


ARM Holdings 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.

ARM Holdings's Interest Coverage for the fiscal year that ended in Mar. 2024 is calculated as

Here, for the fiscal year that ended in Mar. 2024, ARM Holdings's Interest Expense was $0 Mil. Its Operating Income was $117 Mil. And its Long-Term Debt & Capital Lease Obligation was $194 Mil.

GuruFocus does not calculate ARM Holdings's interest coverage with the available data.

ARM Holdings's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, ARM Holdings's Interest Expense was $0 Mil. Its Operating Income was $22 Mil. And its Long-Term Debt & Capital Lease Obligation was $194 Mil.

GuruFocus does not calculate ARM Holdings's interest coverage with the available data.

* 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.

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

ARM Holdings  (NAS:ARM) 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 .

ARM Holdings Interest Coverage Related Terms

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

ARM Holdings (ARM Holdings) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » ARM Holdings PLC (NAS:ARM) » Definitions » Interest Coverage
Comparable Companies
NXPI MRVL MCHP ON MU GFS ADI MPWR SWKS QRVO NVDA TPE:2330 AVGO AMD INTC TXN QCOM XKRX:000660 TPE:2454 XTER:IFX
Traded in Other Exchanges
ARM:Mexico O9T:Germany O9T:Germany O9T:Germany
Address
110 Fulbourn Road, Cambridge, GBR, CB1 9NJ
Website
https://www.arm.com
Arm Holdings is the IP owner and developer of the ARM architecture (ARM stands for Acorn RISC Machine), which is used in 99% of the world's smartphone CPU cores, and it also has high market share in other battery-powered devices like wearables, tablets, or sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allows them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Both off-the-shelf and architectural customers pay a royalty fee per chip shipped.