Hillshire Brands Co (LSE:HSH) Interest Coverage : 5.36 (As of Jun. 2014)

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What is Hillshire Brands Co 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. Hillshire Brands Co's Operating Income for the three months ended in Jun. 2014 was $59 Mil. Hillshire Brands Co's Interest Expense for the three months ended in Jun. 2014 was $-11 Mil. Hillshire Brands Co's interest coverage for the quarter that ended in Jun. 2014 was 5.36. The higher the ratio, the stronger the company's financial strength is.

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

LSE:HSH' s Interest Coverage Range Over the Past 10 Years
Min: 0.96 Med: 5.78 Max: 8.13
Current: 6.38

LSE:HSH's Interest Coverage is not ranked
in the Consumer Packaged Goods industry.
Industry Median: 8.55 vs LSE:HSH: 6.38

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

Hillshire Brands Co Interest Coverage Historical Data

The historical data trend for Hillshire Brands Co'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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Hillshire Brands Co Interest Coverage Chart

Hillshire Brands Co Annual Data

Trend

Jun04

Jun05

Jun06

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Interest Coverage

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4.19

6.24

5.36

0.96

6.19

Hillshire Brands Co Quarterly Data
	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14
Interest Coverage	Get a 7-Day Free Trial															3.77	4.23	9.67	6.33	5.36

Competitive Comparison of Hillshire Brands Co's Interest Coverage

For the Packaged Foods subindustry, Hillshire Brands Co'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.

Hillshire Brands Co's Interest Coverage Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Hillshire Brands Co's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Hillshire Brands Co's Interest Coverage falls into.

Hillshire Brands Co 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.

Hillshire Brands Co's Interest Coverage for the fiscal year that ended in Jun. 2013 is calculated as

Here, for the fiscal year that ended in Jun. 2013, Hillshire Brands Co's Interest Expense was $-48 Mil. Its Operating Income was $297 Mil. And its Long-Term Debt & Capital Lease Obligation was $932 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2013 )	/	Interest Expense (A: Jun. 2013 )
	=	-1	*	297	/	-48
	=	6.19

Hillshire Brands Co's Interest Coverage for the quarter that ended in Jun. 2014 is calculated as

Here, for the three months ended in Jun. 2014, Hillshire Brands Co's Interest Expense was $-11 Mil. Its Operating Income was $59 Mil. And its Long-Term Debt & Capital Lease Obligation was $839 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2014 )	/	Interest Expense (Q: Jun. 2014 )
	=	-1	*	59	/	-11
	=	5.36

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

Hillshire Brands Co (LSE:HSH) 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 .

Hillshire Brands Co Interest Coverage Related Terms

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

Hillshire Brands Co (LSE:HSH) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Hillshire Brands Co (LSE:HSH) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.hillshirebrands.com

Hillshire Brands Co was organized as a corporation in Baltimore, Maryland in 1941 as The C.D. Kenny Company, was renamed Sara Lee Corporation in 1985 and adopted its current name in June 2012. It is a manufacturer and marketer of food products. It provides meat-centric food solutions for the retail and foodservice markets. The Company's Brands' portfolio includes iconic brands such as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells and Gallo Salame. Its operations are organized around two business segments - Retail and Foodservice/Other. Retail sells a variety of packaged meat and frozen bakery products to retail customers in North America. Products include hot dogs and corn dogs, breakfast sausages, breakfast convenience items, including breakfast sandwiches and bowls, dinner sausages, premium deli and luncheon meats and cooked hams, as well as frozen pies, cakes, cheesecakes and other desserts. The primary raw materials for the segment's products include pork and beef, which are purchased almost entirely from third party suppliers and independent farmers, and poultry. The branded meat business is highly competitive, with an emphasis on product quality, innovation and value. New product innovations are a key component to its success. The Retail segment competes with other international, national, regional and local companies in each of the product categories. Foodservice/Other sells a variety of meat and bakery products to foodservice customers in North America. Products include hot dogs and corn dogs, breakfast sausages and sandwiches, dinner sausages, premium deli and luncheon meats, ham, beef and turkey as well as a variety of bakery products, including pastries, muffins, frozen pies, cakes and cheesecakes. The primary raw materials for Foodservice/Other's products include pork, beef and poultry and, to a lesser extent, wheat flour, sugar, corn syrup, cooking oils, butter, fruit and eggs, which are purchased from independent suppliers and farmers. The Foodservice/Other segment competes with other international, national, regional and local companies in each of its product categories. It considers major mass retailers and supermarket chains in the United States to be its most significant customers. The Company is subject to regulations administered by the U.S. Department of Agriculture and the Food and Drug Administration.

Hillshire Brands Co (LSE:HSH) Headlines

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