Adobe Systems Incorporated (ADBE)

Interest coverage

		Feb 28, 2025	Nov 30, 2024	Nov 29, 2024	Aug 31, 2024	Aug 30, 2024	May 31, 2024	Mar 1, 2024	Feb 29, 2024	Dec 1, 2023	Nov 30, 2023	Sep 1, 2023	Aug 31, 2023	Jun 2, 2023	May 31, 2023	Mar 3, 2023	Feb 28, 2023	Dec 2, 2022	Nov 30, 2022	Sep 2, 2022	Aug 31, 2022
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	8,335,000	8,083,000	7,927,000	6,965,000	6,779,000	6,623,000	6,574,000	7,349,000	7,212,000	7,052,000	6,892,000	6,752,000	6,568,000	6,437,000	6,266,000	6,120,000	5,781,000	5,756,000	5,771,000	5,858,000
Interest expense (ttm)	US$ in thousands	213,000	202,000	193,000	170,000	146,000	123,000	110,000	110,000	110,000	108,000	106,000	111,000	116,000	118,000	120,000	116,000	112,000	112,000	112,000	112,000
Interest coverage		39.13	40.01	41.07	40.97	46.43	53.85	59.76	66.81	65.56	65.30	65.02	60.83	56.62	54.55	52.22	52.76	51.62	51.39	51.53	52.30

February 28, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $8,335,000K ÷ $213,000K
= 39.13

The interest coverage ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Based on the data provided for Adobe Systems Incorporated, we observe a generally increasing trend in the interest coverage ratio from August 31, 2022, to February 28, 2025. The interest coverage ratio started at 52.30 on August 31, 2022, and reached a peak of 66.81 on February 29, 2024. This upward trend indicates that Adobe's ability to cover its interest expenses improved over this period.

However, it is worth noting a slight decline in the interest coverage ratio from March 1, 2024, to August 31, 2024, where the ratio decreased from 59.76 to 40.97. This decline suggests a potential decrease in Adobe's ability to cover its interest expenses during this period.

Overall, the interest coverage ratio for Adobe Systems Incorporated has shown a generally positive trend with some minor fluctuations. It is important for investors and creditors to monitor this ratio to assess the company's ability to meet its interest obligations in the future.