Applied Industrial Technologies (AIT)
Interest coverage
| 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 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 495,823 | 483,295 | 489,000 | 487,299 | 473,151 | 455,560 | 424,492 | 389,776 | 357,858 | 329,735 | 308,359 | 227,760 | 205,454 | 171,381 | 18,964 | 80,131 | 88,989 | 113,936 | 226,395 | 228,615 |
| Interest expense (ttm) | US$ in thousands | 20,544 | 10,854 | 15,362 | 19,630 | 24,790 | 23,974 | 25,053 | 25,875 | 26,785 | 27,922 | 29,678 | 30,329 | 30,592 | 31,007 | 32,204 | 34,129 | 36,535 | 39,234 | 40,376 | 40,371 |
| Interest coverage | 24.13 | 44.53 | 31.83 | 24.82 | 19.09 | 19.00 | 16.94 | 15.06 | 13.36 | 11.81 | 10.39 | 7.51 | 6.72 | 5.53 | 0.59 | 2.35 | 2.44 | 2.90 | 5.61 | 5.66 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $495,823K ÷ $20,544K
= 24.13
The interest coverage ratio for Applied Industrial Technologies has shown fluctuations over the past few quarters. In the latest period ending June 30, 2024, the company demonstrated a solid interest coverage ratio of 24.13, indicating that the company is generating more than enough operating income to cover its interest expenses.
The trend in the interest coverage ratio has generally been positive, with significant improvements seen from the low of 0.59 at the end of March 31, 2021, to the current level of 24.13 as of June 30, 2024. This indicates that the company has become more efficient in generating operating income to cover its interest payments.
The company's interest coverage ratio has consistently been above 1 in all the periods, which signifies that the company has been able to meet its interest obligations from its operating profits. The recent high ratios suggest that the company is in a strong financial position and has a healthy ability to service its debt obligations.
However, it is essential for investors and creditors to monitor the interest coverage ratio over time to ensure the company maintains its ability to meet its interest payments, especially in changing economic conditions that may impact its profitability.