Compass Group (LSE:CPG) Interest Coverage

: 12.02 (As of Sep. 2023)

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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. Compass Group's Operating Income for the six months ended in Sep. 2023 was £1,250 Mil. Compass Group's Interest Expense for the six months ended in Sep. 2023 was £-104 Mil. Compass Group's interest coverage for the quarter that ended in Sep. 2023 was 12.02. The higher the ratio, the stronger the company's financial strength is.

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

LSE:CPG' s Interest Coverage Range Over the Past 10 Years
Min: 4.66 Med: 12.96 Max: 14.63
Current: 10.89

LSE:CPG's Interest Coverage is ranked better than
62.11% of 256 companies
in the Restaurants industry
Industry Median: 6.835 vs LSE:CPG: 10.89

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

Compass Group Interest Coverage Historical Data

The historical data trend for Compass Group'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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Compass Group Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Interest Coverage

14.63

4.66

5.88

12.87

10.89

Compass Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Interest Coverage																9.20	15.02	11.79	9.57	12.02

Competitive Comparison

For the Restaurants subindustry, Compass Group'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.

Compass Group Interest Coverage Distribution

For the Restaurants industry and Consumer Cyclical sector, Compass Group's Interest Coverage distribution charts can be found below:

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

Compass Group 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.

Compass Group's Interest Coverage for the fiscal year that ended in Sep. 2023 is calculated as

Here, for the fiscal year that ended in Sep. 2023, Compass Group's Interest Expense was £-193 Mil. Its Operating Income was £2,102 Mil. And its Long-Term Debt & Capital Lease Obligation was £3,034 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Sep. 2023 )	/	Interest Expense (A: Sep. 2023 )
	=	-1	*	2102	/	-193
	=	10.89

Compass Group's Interest Coverage for the quarter that ended in Sep. 2023 is calculated as

Here, for the six months ended in Sep. 2023, Compass Group's Interest Expense was £-104 Mil. Its Operating Income was £1,250 Mil. And its Long-Term Debt & Capital Lease Obligation was £3,034 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2023 )	/	Interest Expense (Q: Sep. 2023 )
	=	-1	*	1250	/	-104
	=	12.02

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

Compass Group (LSE:CPG) 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 .

Compass Group Interest Coverage Related Terms

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

Compass Group (LSE:CPG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Compass Group PLC (LSE:CPG) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

CMPGY:USA CMPGF:USA CPG:Mexico CPGl:UK XGR2:Germany

Address

Guildford Street, Compass House, Chertsey, Surrey, GBR, KT16 9BQ

Website

https://www.compass-group.com

Compass Group is the largest food-service company globally, operating in more than 50 countries with annual sales of more than GBP 25 billion. Compass Group's model stems from operating on-premises catering facilities, rather than centralised industrial kitchens. Food service is Compass' core focus and contributes more than 80% of revenue. In addition, the company provides support services to clients through activities including cleaning services, office services (for example, concierge services), grounds maintenance, and so on.