Strathcona Resources (TSX:SCR) Interest Coverage : 4.08 (As of Dec. 2023)

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What is Strathcona Resources 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. Strathcona Resources's Operating Income for the three months ended in Dec. 2023 was C$905 Mil. Strathcona Resources's Interest Expense for the three months ended in Dec. 2023 was C$-222 Mil. Strathcona Resources's interest coverage for the quarter that ended in Dec. 2023 was 4.08. The higher the ratio, the stronger the company's financial strength is.

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

TSX:SCR' s Interest Coverage Range Over the Past 10 Years
Min: 4.1 Med: 7.11 Max: 10.04
Current: 4.1

TSX:SCR's Interest Coverage is ranked worse than
64.96% of 762 companies
in the Oil & Gas industry
Industry Median: 6.575 vs TSX:SCR: 4.10

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

Strathcona Resources Interest Coverage Historical Data

The historical data trend for Strathcona Resources'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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Strathcona Resources Interest Coverage Chart

Strathcona Resources Annual Data

Trend

Dec22

Dec23

Interest Coverage

10.04

4.17

Strathcona Resources Quarterly Data
	Sep22	Dec22	Sep23	Dec23
Interest Coverage	11.54	9.15	4.93	4.08

Competitive Comparison of Strathcona Resources's Interest Coverage

For the Oil & Gas E&P subindustry, Strathcona Resources'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.

Strathcona Resources's Interest Coverage Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Strathcona Resources's Interest Coverage distribution charts can be found below:

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

Strathcona Resources 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.

Strathcona Resources'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, Strathcona Resources's Interest Expense was C$-240 Mil. Its Operating Income was C$1,000 Mil. And its Long-Term Debt & Capital Lease Obligation was C$3,027 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1000.2	/	-239.8
	=	4.17

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

Here, for the three months ended in Dec. 2023, Strathcona Resources's Interest Expense was C$-222 Mil. Its Operating Income was C$905 Mil. And its Long-Term Debt & Capital Lease Obligation was C$3,027 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	904.501	/	-221.88
	=	4.08

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

Strathcona Resources (TSX:SCR) 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 .

Strathcona Resources Interest Coverage Related Terms

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

Strathcona Resources (TSX:SCR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Strathcona Resources Ltd (TSX:SCR) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

STHRF:USA YE2:Germany

Address

421 7th Avenue South west, 1900, Calgary, AB, CAN, T2P4K9

Website

https://www.strathconaresources.com

Strathcona Resources Ltd is an energy company, it is a consolidator and developer of oil and gas assets. The company focuses on thermal oil, enhanced oil recovery, and condensate-rich Montney.