Accenture plc (ACN)

Interest coverage

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	9,603,880	9,054,880	9,131,700	7,736,870	6,729,930
Interest expense	US$ in thousands	58,969	47,525	47,320	59,492	33,071
Interest coverage		162.86	190.53	192.98	130.05	203.50

August 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $9,603,880K ÷ $58,969K
= 162.86

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that a company is more capable of servicing its debt with its operating income.

Based on the data provided for Accenture plc, we observe fluctuations in interest coverage over the past five years. In 2024, the interest coverage ratio decreased to 162.86 from 190.53 in 2023, indicating a slight decrease in the company's ability to cover its interest expenses. However, despite the decrease, the ratio remains relatively high, suggesting that Accenture plc still has a strong ability to meet its interest obligations.

Comparing the latest ratio to the ratios from previous years, we note that interest coverage was highest in 2022 at 192.98 and lowest in 2021 at 130.05. The significant fluctuations in the interest coverage ratio over the years may be attributed to changes in operating income, interest expense, or a combination of both factors.

Overall, based on the trend in interest coverage ratios, Accenture plc has demonstrated a generally strong ability to cover its interest costs over the past five years, despite some fluctuations. However, it is essential for investors and stakeholders to further analyze the company's financial performance and debt structure to gain a comprehensive understanding of its financial health and stability.