Softcat (LSE:SCT) Interest Coverage : 404.43 (As of Jan. 2024)

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What is Softcat 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. Softcat's Operating Income for the six months ended in Jan. 2024 was £66.7 Mil. Softcat's Interest Expense for the six months ended in Jan. 2024 was £-0.2 Mil. Softcat's interest coverage for the quarter that ended in Jan. 2024 was 404.43. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Softcat PLC has enough cash to cover all of its debt. Its financial situation is stable.

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

LSE:SCT' s Interest Coverage Range Over the Past 10 Years
Min: 250.35 Med: No Debt Max: No Debt
Current: 533.42

LSE:SCT's Interest Coverage is ranked better than
79.64% of 1601 companies
in the Software industry
Industry Median: 28.88 vs LSE:SCT: 533.42

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

Softcat Interest Coverage Historical Data

The historical data trend for Softcat'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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Softcat Interest Coverage Chart

Softcat Annual Data

Trend

Jul14

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

Interest Coverage

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No Debt

296.62

250.35

538.12

687.31

Softcat Semi-Annual Data
	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24
Interest Coverage	Get a 7-Day Free Trial															N/A	284.63	637.08	734.22	404.43

Competitive Comparison of Softcat's Interest Coverage

For the Information Technology Services subindustry, Softcat'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.

Softcat's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, Softcat's Interest Coverage distribution charts can be found below:

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

Softcat 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.

Softcat's Interest Coverage for the fiscal year that ended in Jul. 2023 is calculated as

Here, for the fiscal year that ended in Jul. 2023, Softcat's Interest Expense was £-0.2 Mil. Its Operating Income was £140.9 Mil. And its Long-Term Debt & Capital Lease Obligation was £7.0 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jul. 2023 )	/	Interest Expense (A: Jul. 2023 )
	=	-1	*	140.898	/	-0.205
	=	687.31

Softcat's Interest Coverage for the quarter that ended in Jan. 2024 is calculated as

Here, for the six months ended in Jan. 2024, Softcat's Interest Expense was £-0.2 Mil. Its Operating Income was £66.7 Mil. And its Long-Term Debt & Capital Lease Obligation was £6.4 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jan. 2024 )	/	Interest Expense (Q: Jan. 2024 )
	=	-1	*	66.731	/	-0.165
	=	404.43

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

Softcat (LSE:SCT) 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 .

Softcat Interest Coverage Related Terms

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

Softcat (LSE:SCT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Softcat PLC (LSE:SCT) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

SCTl:UK

Address

Fieldhouse Lane, Solar House, Marlow, Buckinghamshire, GBR, SL7 1LW

Website

https://www.softcat.com

Softcat PLC is a information technology infrastructure and service provider. It offers software licensing, workplace technology, networking and security, and cloud and data center solutions to the corporates, public sector organizations and small to medium-sized business segment, of which small to medium-sized business segment is the major business provider to the company. The entity earns revenue from offering products like software, hardware, and services, as well as the sale of the company's own services, of which majority of the revenue is derived from offering software products.