Air Products and Chemicals Inc (APD)

Interest coverage

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	3,028,900	2,884,900	2,703,700	2,474,400	2,377,100
Interest expense	US$ in thousands	177,500	128,000	141,800	109,300	137,000
Interest coverage		17.06	22.54	19.07	22.64	17.35

September 30, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,028,900K ÷ $177,500K
= 17.06

The interest coverage ratio is a measure of a company's ability to meet its interest obligations using its operating income. Higher ratios indicate a greater ability to cover interest expenses with operating income. Air Products & Chemicals Inc.'s interest coverage ratio has fluctuated over the past five years, ranging from 17.05 to 22.17. The highest ratio was in 2022 at 22.17, indicating a strong ability to cover interest expenses. In 2023, the ratio decreased to 18.64, but it still remains at a healthy level. Overall, the company has demonstrated a consistent ability to cover its interest expenses with operating income over the past five years, suggesting financial stability in meeting its debt obligations.