Applied Industrial Technologies (AIT)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 518,674 | 474,601 | 356,575 | 207,869 | 92,500 |
| Interest expense | US$ in thousands | 20,544 | 24,790 | 26,785 | 30,807 | 37,264 |
| Interest coverage | 25.25 | 19.14 | 13.31 | 6.75 | 2.48 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $518,674K ÷ $20,544K
= 25.25
Applied Industrial Technologies' interest coverage has been improving steadily over the past five years, indicating the company's increasing ability to cover its interest payments with operating income. The interest coverage ratio has increased from 2.48 in 2020 to 25.25 in 2024, showing a strong upward trend. This suggests that the company is in a better financial position to meet its interest obligations and indicates a lower risk of default on its debt. Additionally, the significant improvement in the interest coverage ratio over the years reflects the company's enhanced profitability and financial stability. Overall, the trend in Applied Industrial Technologies' interest coverage ratio demonstrates a positive financial performance and indicates a healthy financial position for the company.