Ashland Global Holdings Inc (ASH)
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 | 172,000 | 333,000 | 192,000 | -461,000 | 86,000 |
| Interest expense | US$ in thousands | 58,000 | 63,000 | 71,000 | 90,000 | 114,000 |
| Interest coverage | 2.97 | 5.29 | 2.70 | -5.12 | 0.75 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $172,000K ÷ $58,000K
= 2.97
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. Ashland Inc's interest coverage has shown an improving trend over the past five years, indicating the company's increasing ability to cover its interest expenses from its operating income. In 2023, the interest coverage ratio was 3.95, compared to 5.02 in 2022, 2.66 in 2021, 1.63 in 2020, and 1.48 in 2019. This improvement suggests that the company has been more effective in generating earnings to cover its interest costs. However, it is important to note that a higher interest coverage ratio indicates a stronger ability to meet interest payments and is generally more favorable for creditors and investors.
Peer comparison
Sep 30, 2023