Adient PLC (ADNT)

Interest coverage

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	250,000	258,000	332,000	408,000	371,000	423,000	300,000	228,000	173,000	1,192,000	1,159,000	1,330,000	1,586,000	411,000	153,000	38,000	-287,000	-284,000	56,000	-36,000
Interest expense (ttm)	US$ in thousands	200,000	200,000	202,000	206,000	166,000	195,000	183,000	178,000	199,000	173,000	191,000	208,000	229,000	227,000	228,000	213,000	203,000	158,000	161,000	151,000
Interest coverage		1.25	1.29	1.64	1.98	2.23	2.17	1.64	1.28	0.87	6.89	6.07	6.39	6.93	1.81	0.67	0.18	-1.41	-1.80	0.35	-0.24

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $250,000K ÷ $200,000K
= 1.25

The interest coverage ratio for Adient PLC fluctuated significantly over the past few years. The trend shows that the company's ability to cover interest expenses with its operating profits varied widely.

In recent quarters, there has been a noticeable decline in the interest coverage ratio, indicating that Adient may be facing challenges in meeting its interest obligations from its operating income. The ratios have been below the ideal level of 2, suggesting that the company's earnings may not be sufficient to comfortably cover its interest payments.

It is important to note the sharp fluctuations in the interest coverage ratio, with some quarters showing very low or even negative ratios. This could raise concerns about the company's financial stability and ability to service its debt.

Overall, the analysis of Adient PLC's interest coverage ratio highlights the importance of monitoring the company's ability to generate enough operating income to cover its interest expenses in order to assess its financial health and sustainability.