Foster Wheeler AG (FRA:FWI) Interest Coverage : 18.97 (As of Sep. 2014)

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What is Foster Wheeler AG 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. Foster Wheeler AG's Operating Income for the three months ended in Sep. 2014 was €39 Mil. Foster Wheeler AG's Interest Expense for the three months ended in Sep. 2014 was €-2 Mil. Foster Wheeler AG's interest coverage for the quarter that ended in Sep. 2014 was 18.97. The higher the ratio, the stronger the company's financial strength is.

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

FRA:FWI' s Interest Coverage Range Over the Past 10 Years
Min: 0.49 Med: 17.98 Max: 34.72
Current: 18.51

FRA:FWI's Interest Coverage is not ranked
in the Construction industry.
Industry Median: 7.055 vs FRA:FWI: 18.51

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

Foster Wheeler AG Interest Coverage Historical Data

The historical data trend for Foster Wheeler AG'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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Foster Wheeler AG Interest Coverage Chart

Foster Wheeler AG Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Interest Coverage

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32.84

18.93

17.98

18.55

15.22

Foster Wheeler AG Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Interest Coverage	Get a 7-Day Free Trial															20.06	12.46	9.14	N/A	18.97

Competitive Comparison of Foster Wheeler AG's Interest Coverage

For the Engineering & Construction subindustry, Foster Wheeler AG'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.

Foster Wheeler AG's Interest Coverage Distribution in the Construction Industry

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

* The bar in red indicates where Foster Wheeler AG's Interest Coverage falls into.

Foster Wheeler AG 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.

Foster Wheeler AG's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as

Here, for the fiscal year that ended in Dec. 2013, Foster Wheeler AG's Interest Expense was €-10 Mil. Its Operating Income was €147 Mil. And its Long-Term Debt & Capital Lease Obligation was €83 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2013 )	/	Interest Expense (A: Dec. 2013 )
	=	-1	*	146.998	/	-9.656
	=	15.22

Foster Wheeler AG's Interest Coverage for the quarter that ended in Sep. 2014 is calculated as

Here, for the three months ended in Sep. 2014, Foster Wheeler AG's Interest Expense was €-2 Mil. Its Operating Income was €39 Mil. And its Long-Term Debt & Capital Lease Obligation was €75 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2014 )	/	Interest Expense (Q: Sep. 2014 )
	=	-1	*	39.292	/	-2.071
	=	18.97

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

Foster Wheeler AG (FRA:FWI) 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 .

Foster Wheeler AG Interest Coverage Related Terms

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

Foster Wheeler AG (FRA:FWI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Foster Wheeler AG (FRA:FWI) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.fwc.com

Foster Wheeler AG was formed in 1927. The Company, with its subsidiaries, is a provider of construction and engineering services. The Company serves the oil and gas, oil refining, chemical and petrochemical, environmental, power generation, and power plant operation and maintenance industries. The Company operates through two business groups: its Global Engineering and Construction Group (Global E&C Group) and its Global Power Group. The Global E&C Group operates and designs, engineers, and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, pharmaceutical and biotechnology facilities and related infrastructure, power generation and distribution facilities, and gasification facilities. The group provides engineering, project management and construction management services, and also designs facilities in new or developing market sectors, such as carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. The Global E&C Group additionally performs environmental remediation services. The Global Power Group designs, manufactures and installs steam generators and auxiliary equipment for electric power generating stations, district heating and power plants and industrial facilities. It offers new and retrofit nitrogen-oxide reduction systems, and provides site services related to these products, including construction and erection, maintenance engineering, plant upgrading, and life extensions. The Global Power Group conducts research and development in the areas of combustion, solid, fluid, and gas dynamics, heat transfer, materials, and solid mechanics. Further, this group owns and operates independent power production and waste-to-energy facilities, as well as power generation facilities for the process and petrochemical industries. Companies that compete with Global E&C Group include but are not limited to the following: Bechtel Corporation; Chicago Bridge & Iron Company N.V.; Chiyoda Corporation; Fluor Corporation; Jacobs Engineering Group Inc.; JGC Corporation; KBR, Inc.; Saipem S.p.A.; Technip; TÃ©cnicas Reunidas, SA; and WorleyParsons Ltd. Companies that compete with Global Power Group include but are not limited to the following: Alstom Power S.A.; Andritz Group AG; The Babcock & Wilcox Company; Babcock Power Inc.; Dongfang Boiler Works (a subsidiary of Dong Fang Electric Corporation); Doosan-Babcock; Harbin Boiler Co., Ltd.; Hitachi, Ltd.; Metso Corporation; Mitsubishi Heavy Industries Ltd.; and Shanghai Boiler Works Ltd. The operations are subject to certain federal, state and local environmental, occupational health and product safety laws.

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