Amcor PLC (AMCR)
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 | 1,241,000 | 1,531,000 | 1,264,000 | 1,353,000 | 1,006,000 |
| Interest expense | US$ in thousands | 348,000 | 290,000 | 159,000 | 153,000 | 207,000 |
| Interest coverage | 3.57 | 5.28 | 7.95 | 8.84 | 4.86 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,241,000K ÷ $348,000K
= 3.57
The interest coverage ratio for Amcor PLC has shown a fluctuating trend over the past five years, ranging from a low of 3.57 in June 2024 to a high of 8.84 in June 2021. This ratio indicates the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio suggests that the company is more capable of meeting its interest payments from its operating earnings.
The decreasing trend in the interest coverage ratio from 8.84 in June 2021 to 3.57 in June 2024 raises some concerns about the company's ability to cover its interest expenses. A declining interest coverage ratio may indicate increased financial risk and could potentially signal to investors and creditors that the company may face difficulties in servicing its debt obligations going forward.
It is important for stakeholders to monitor Amcor PLC's interest coverage ratio closely to assess the company's financial health and ability to manage its debt effectively. Additionally, further analysis of the factors contributing to the fluctuations in the interest coverage ratio would provide valuable insight into the company's financial performance and sustainability.
Peer comparison
Jun 30, 2024