American Woodmark Corporation (AMWD)
Interest coverage
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 161,394 | 136,352 | 36,159 | 114,738 | 141,694 |
| Interest expense | US$ in thousands | 1,044 | 966 | 973 | 2,574 | 2,724 |
| Interest coverage | 154.59 | 141.15 | 37.16 | 44.58 | 52.02 |
April 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $161,394K ÷ $1,044K
= 154.59
American Woodmark Corporation has displayed a consistently strong interest coverage ratio over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. The increasing trend in the interest coverage ratio from 2019 to 2022 indicates a strengthening ability to meet interest obligations. The significant improvement in 2022, with an interest coverage ratio of 37.16 to 154.59 in 2024, reflects the company's enhanced financial health and profitability. This suggests that American Woodmark Corporation has sufficient earnings to comfortably meet its interest payments, which is a positive indicator of financial stability and solvency.