WDS (ASX:WDS) Interest Coverage : 0 (At Loss) (As of Dec. 2014)

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What is WDS 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. WDS's Operating Income for the six months ended in Dec. 2014 was A$-18.5 Mil. WDS's Interest Expense for the six months ended in Dec. 2014 was A$-0.6 Mil. did not have earnings to cover the interest expense. The higher the ratio, the stronger the company's financial strength is.

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

ASX:WDS's Interest Coverage is not ranked ^*
in the Construction industry.
Industry Median: 7.06
* 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.

WDS Interest Coverage Historical Data

The historical data trend for WDS'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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WDS Interest Coverage Chart

WDS Annual Data

Trend

Jun06

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Jun14

Interest Coverage

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5.21

5.47

15.50

WDS Semi-Annual Data
	Jun06	Jun07	Dec07	Jun08	Dec08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14
Interest Coverage	Get a 7-Day Free Trial												5.49	5.45	16.27	14.36	-

Competitive Comparison of WDS's Interest Coverage

For the Engineering & Construction subindustry, WDS'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.

WDS's Interest Coverage Distribution in the Construction Industry

For the Construction industry and Industrials sector, WDS's Interest Coverage distribution charts can be found below:

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

WDS 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.

WDS's Interest Coverage for the fiscal year that ended in Jun. 2014 is calculated as

Here, for the fiscal year that ended in Jun. 2014, WDS's Interest Expense was A$-1.2 Mil. Its Operating Income was A$17.9 Mil. And its Long-Term Debt & Capital Lease Obligation was A$6.3 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2014 )	/	Interest Expense (A: Jun. 2014 )
	=	-1	*	17.854	/	-1.152
	=	15.50

WDS's Interest Coverage for the quarter that ended in Dec. 2014 is calculated as

Here, for the six months ended in Dec. 2014, WDS's Interest Expense was A$-0.6 Mil. Its Operating Income was A$-18.5 Mil. And its Long-Term Debt & Capital Lease Obligation was A$10.0 Mil.

WDS did not have earnings to cover the interest expense.

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

WDS (ASX:WDS) 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 .

WDS Interest Coverage Related Terms

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WDS (ASX:WDS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » WDS Ltd (ASX:WDS) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.wdslimited.com.au

WDS Limited is an Australian provider of the development, design, engineering, construction, fabrication and maintenance related services to the cross-section of energy, mining and infrastructure sectors in Australia. The Company delivers services through two divisions, being Energy & Infrastructure and Mining.