Coventry Health Care, (FRA:HCA) Interest Coverage : 8.79 (As of Mar. 2013)

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What is Coventry Health Care, 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. Coventry Health Care,'s Operating Income for the three months ended in Mar. 2013 was €167 Mil. Coventry Health Care,'s Interest Expense for the three months ended in Mar. 2013 was €-19 Mil. Coventry Health Care,'s interest coverage for the quarter that ended in Mar. 2013 was 8.79. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Coventry Health Care,'s Interest Coverage or its related term are showing as below:

FRA:HCA' s Interest Coverage Range Over the Past 10 Years
Min: 0 Med: 0 Max: 7.09
Current: 7.09

FRA:HCA's Interest Coverage is not ranked
in the Healthcare Plans industry.
Industry Median: 7.85 vs FRA:HCA: 7.09

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

Coventry Health Care, Interest Coverage Historical Data

The historical data trend for Coventry Health Care,'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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Coventry Health Care, Interest Coverage Chart

Coventry Health Care, Annual Data

Trend

Dec03

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Interest Coverage

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6.43

5.91

8.57

8.76

7.64

Coventry Health Care, Quarterly Data
	Jun08	Sep08	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13
Interest Coverage	Get a 7-Day Free Trial															10.82	5.90	6.46	7.25	8.79

Competitive Comparison of Coventry Health Care,'s Interest Coverage

For the Healthcare Plans subindustry, Coventry Health Care,'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.

Coventry Health Care,'s Interest Coverage Distribution in the Healthcare Plans Industry

For the Healthcare Plans industry and Healthcare sector, Coventry Health Care,'s Interest Coverage distribution charts can be found below:

* The bar in red indicates where Coventry Health Care,'s Interest Coverage falls into.

Coventry Health Care, 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.

Coventry Health Care,'s Interest Coverage for the fiscal year that ended in Dec. 2012 is calculated as

Here, for the fiscal year that ended in Dec. 2012, Coventry Health Care,'s Interest Expense was €-76 Mil. Its Operating Income was €579 Mil. And its Long-Term Debt & Capital Lease Obligation was €1,208 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2012 )	/	Interest Expense (A: Dec. 2012 )
	=	-1	*	578.885	/	-75.795
	=	7.64

Coventry Health Care,'s Interest Coverage for the quarter that ended in Mar. 2013 is calculated as

Here, for the three months ended in Mar. 2013, Coventry Health Care,'s Interest Expense was €-19 Mil. Its Operating Income was €167 Mil. And its Long-Term Debt & Capital Lease Obligation was €1,224 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2013 )	/	Interest Expense (Q: Mar. 2013 )
	=	-1	*	166.882	/	-18.977
	=	8.79

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

Coventry Health Care, (FRA:HCA) 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 .

Coventry Health Care, Interest Coverage Related Terms

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

Coventry Health Care, (FRA:HCA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Plans » Coventry Health Care, Inc. (FRA:HCA) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

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Address

Website

Coventry Health Care, Inc. was incorporated under the laws of the State of Delaware on December 17, 1997 and is the successor to Coventry Corporation, which was incorporated on November 21, 1986. The Company provides risk and fee-based managed care products and services to a cross section of individuals, employer and government-funded groups, government agencies, and other insurance carriers and administrators. Its operations are segmented into three - Commercial Products, Government Programs and Workers' Compensation. The Commercial Products segment provides health plan commercial risk, commercial management services, Medicare Advantage Coordinated Care Plans, and Medicaid products. Its health plans offer commercial risk products, including health maintenance organization, preferred provider organization, and point of service products to individuals and employer groups. This segment also provides health insurance benefits under the Federal Employees Health Benefits Program; and administrative services only products, such as medical claims administration, pharmacy benefits management, and utilization management and quality assurance programs. In addition, it offers consumer-directed benefit options comprising health reimbursement and savings accounts to commercial customers; provider network rental services through a PPO network to national, regional, and local third-party administrators, as well as insurance carriers; and coordination of mental health and substance abuse treatment services. The Government Programs segment offers Medicare Part D program that provides access to prescription drug coverage for eligible beneficiaries; and comprehensive health benefits on a risk basis to members participating in the Medicare Advantage CCP and Medicaid programs. Its Workers Compensation segment offers fee-based managed care services, such as provider network access, bill review, pharmacy benefit management, durable medical equipment and ancillary services, and care management services to underwriters and administrators of workers compensation insurance. The company serves individuals, employer and government-funded groups, government agencies, and other insurance carriers and administrators through direct sales staff, and independent insurance brokers and agents.