McKesson (McKesson) Interest Coverage

: 10.09 (As of Dec. 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. McKesson's Operating Income for the three months ended in Dec. 2023 was $646 Mil. McKesson's Interest Expense for the three months ended in Dec. 2023 was $-64 Mil. McKesson's interest coverage for the quarter that ended in Dec. 2023 was 10.09. The higher the ratio, the stronger the company's financial strength is.

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

MCK' s Interest Coverage Range Over the Past 10 Years
Min: 8.34 Med: 11.36 Max: 18.48
Current: 15.45

MCK's Interest Coverage is ranked better than
58.23% of 79 companies
in the Medical Distribution industry
Industry Median: 9.85 vs MCK: 15.45

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

McKesson Interest Coverage Historical Data

The historical data trend for McKesson'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.

McKesson Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

12.56

11.41

15.20

14.57

18.48

McKesson Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																18.42	13.95	24.51	16.02	10.09

Competitive Comparison

For the Medical Distribution subindustry, McKesson'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.

McKesson Interest Coverage Distribution

For the Medical Distribution industry and Healthcare sector, McKesson's Interest Coverage distribution charts can be found below:

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

McKesson 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.

McKesson'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, McKesson's Interest Expense was $-248 Mil. Its Operating Income was $4,582 Mil. And its Long-Term Debt & Capital Lease Obligation was $6,028 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	4582	/	-248
	=	18.48

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

Here, for the three months ended in Dec. 2023, McKesson's Interest Expense was $-64 Mil. Its Operating Income was $646 Mil. And its Long-Term Debt & Capital Lease Obligation was $7,046 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	646	/	-64
	=	10.09

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

McKesson (NYSE:MCK) 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 .

McKesson Interest Coverage Related Terms

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

McKesson (McKesson) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Distribution » McKesson Corp (NYSE:MCK) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

MCK:Germany MCK:Germany M1CK34:Brazil

Address

6555 State Highway 161, Irving, TX, USA, 75039

Website

https://www.mckesson.com

McKesson Corp is one of three leading pharmaceutical wholesalers in the U.S. engaged in sourcing and distributing branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail order), hospitals networks, and healthcare providers. Along with Cencora and Cardinal Health, the three account for over 90% of the U.S. pharmaceutical wholesale industry. Outside the U.S. market, McKesson engages in pharmaceutical wholesale and distribution in Canada. Additionally, the company supplies medical-surgical products and equipment to healthcare facilities and provides a variety of technology solutions for pharmacies.

Executives

Brian S. Tyler	officer: Chief Executive Officer	MCKESSON CORPORATION, 6555 STATE HWY 161, IRVING TX 75039
Leann B Smith	officer: EVP & Chief HR Officer	6555 NORTH STATE HWY 161, IRVING TX 75039
Thomas L Rodgers	officer: EVP, Chief Strategy & BDO	6555 NORTH STATE HWY 161, IRVING TX 75039
Lori A. Schechter	officer: EVP, Chief Legal Officer & GC	MCKESSON CORPORATION, 6555 NORTH STATE HWY 161, IRVING TX 75039
Nancy Flores	officer: EVP, CIO & CTO	6555 NORTH STATE HWY 161, IRVING TX 75039
Britt J. Vitalone	officer: EVP & CFO	MCKESSON CORPORATION, 6555 STATE HWY 161, IRVING TX 75039
Tracy Faber	officer: EVP & Chief HR Officer	6555 NORTH STATE HWY 161, IRVING TX 75039
Maria Martinez	director	THE LANDMARK @ 1 MARKET STREET, SUITE 300, SAN FRANCISCO CA 94105
Susan Nowakowski	director	14778 EL RODEO CT., RANCHO SANTA FE CA 92067
Dominic J Caruso	director	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Donald R Knauss	director	P O BOX 1734, ATLANTA GA 30301
Bradley E Lerman	director	MEDTRONIC, INC., 710 MEDTRONIC PKWY MSLC300, MINNEAPOLIS MN 55432
Webster Roy Dunbar	director	5757 N. GREEN BAY AVENUE, MILWAUKEE WI 53209
Rutledge Napoleon B Jr	officer: SVP, Controller & CAO	2999 WILDWOOD PARKWAY, ATLANTA GA 30339
Kathleen Wilson-thompson	director	PO BOX 3599, BATTLE CREEK MI 49016-3599