ABM Industries Incorporated (ABM)
Interest coverage
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 413,300 | 351,100 | 208,400 | 98,000 | 211,200 |
| Interest expense | US$ in thousands | 82,300 | 41,100 | 28,600 | 44,600 | 51,100 |
| Interest coverage | 5.02 | 8.54 | 7.29 | 2.20 | 4.13 |
October 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $413,300K ÷ $82,300K
= 5.02
The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings. ABM Industries Inc.'s interest coverage has shown some fluctuation over the past five years. In 2023, the interest coverage ratio was 5.02, reflecting a decrease from the previous year. This suggests that the company's ability to cover its interest expenses with its earnings declined. However, in 2022, the ratio was considerably higher at 8.54, indicating a strong ability to meet interest payments. This was also the case in 2021, where the interest coverage ratio stood at 7.28, showing a healthy capacity to cover interest costs. The company's interest coverage ratios in 2020 and 2019 were 6.24 and 4.36, respectively, which indicate sufficient coverage of interest expenses, albeit at a lower level compared to 2022 and 2021. Overall, while there has been some variability, ABM Industries Inc. has generally maintained an adequate ability to fulfill its interest obligations with its earnings over the past five years.
Peer comparison
Oct 31, 2023