Ashland Global Holdings Inc (ASH)
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 | -26,000 | 172,000 | 333,000 | 192,000 | -461,000 |
| Interest expense | US$ in thousands | 59,000 | 58,000 | 63,000 | 71,000 | 90,000 |
| Interest coverage | -0.44 | 2.97 | 5.29 | 2.70 | -5.12 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-26,000K ÷ $59,000K
= -0.44
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Looking at the historical data of Ashland Global Holdings Inc, the interest coverage ratio has fluctuated over the past five years. In 2024, the ratio of -0.44 indicates that the company's operating income was not sufficient to cover its interest expenses. This is a concerning sign as it suggests financial challenges in meeting its debt obligations.
In 2023 and 2022, the interest coverage ratios of 2.97 and 5.29 respectively show an improvement, indicating a better ability to cover interest expenses with operating income. However, the ratio dropped to 2.70 in 2021, signifying a slight decline in financial health.
The most significant outlier is in 2020, where the interest coverage ratio was -5.12, indicating a substantial inability to cover interest expenses with operating income. This could raise red flags about the company's financial solvency during that period.
Overall, the trend in Ashland Global Holdings Inc's interest coverage ratio shows some inconsistency, with periods of improvement and deterioration. Investors and stakeholders should closely monitor this ratio to assess the company's ability to fulfill its debt obligations and manage financial risks.
Peer comparison
Sep 30, 2024