Air Products and Chemicals Inc (APD)

Interest coverage

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	4,466,100	3,028,900	2,884,900	2,703,700	2,474,400
Interest expense	US$ in thousands	218,800	177,500	128,000	141,800	109,300
Interest coverage		20.41	17.06	22.54	19.07	22.64

September 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,466,100K ÷ $218,800K
= 20.41

The interest coverage ratio for Air Products and Chemicals Inc has fluctuated over the past five years, ranging from a low of 17.06 in 2023 to a high of 22.64 in 2020. The interest coverage ratio measures the company's ability to meet its interest payment obligations from its operating profits. A higher interest coverage ratio indicates that the company is more capable of servicing its debt with its earnings.

In 2024, the interest coverage ratio improved to 20.41, showing that Air Products and Chemicals Inc generated sufficient operating income to cover its interest expenses over 20 times. This signifies a strong financial position and less risk of defaulting on its debt obligations. However, it is worth noting that the ratio was slightly lower than the peak in 2022 and 2020.

Overall, Air Products and Chemicals Inc has maintained a healthy interest coverage ratio over the years, indicating sound financial health and a strong ability to service its debt obligations through its operating earnings.