Ashland Global Holdings Inc (ASH)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 117,000 | 172,000 | 261,000 | 311,000 | 328,000 | 333,000 | 335,000 | 268,000 | 216,000 | 191,000 | 52,000 | 55,000 | -461,000 | -461,000 | -397,000 | -402,000 | 110,000 | 86,000 | 84,000 | 71,000 |
| Interest expense (ttm) | US$ in thousands | 58,000 | 58,000 | 63,000 | 63,000 | 63,000 | 63,000 | 71,000 | 71,000 | 71,000 | 71,000 | 80,000 | 81,000 | 89,000 | 90,000 | 122,000 | 122,000 | 114,000 | 114,000 | 135,000 | 136,000 |
| Interest coverage | 2.02 | 2.97 | 4.14 | 4.94 | 5.21 | 5.29 | 4.72 | 3.77 | 3.04 | 2.69 | 0.65 | 0.68 | -5.18 | -5.12 | -3.25 | -3.30 | 0.96 | 0.75 | 0.62 | 0.52 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $117,000K ÷ $58,000K
= 2.02
Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to meet interest obligations. Based on the data provided, Ashland Inc's interest coverage ratio has fluctuated over the past eight quarters.
In the most recent quarter, as of December 31, 2023, the interest coverage ratio stood at 3.59, which indicates that the company's earnings were sufficient to cover its interest expenses approximately 3.59 times. This suggests a moderate ability to meet interest obligations.
The ratio was higher in the previous quarter, at 3.95 as of September 30, 2023, suggesting an improved ability to cover interest expenses compared to the most recent period.
The lack of data for the two quarters prior to June 30, 2023 limits a comprehensive trend analysis. However, looking further back, the interest coverage ratio was relatively strong at 7.28 as of December 31, 2022, and 5.02 as of September 30, 2022. This may indicate a slight deterioration in the company's ability to cover interest expenses compared to the earlier periods.
It is important to note that an interest coverage ratio below 1 may indicate that the company is not generating enough earnings to cover its interest expenses, potentially raising concerns about its financial stability. Therefore, while the recent ratios signal a moderate ability to meet interest obligations, close monitoring of future ratios is warranted to assess the company's financial health and its ability to manage its debt obligations.
Peer comparison
Dec 31, 2023