AeroVironment Inc (AVAV)
Interest coverage
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 66,754 | -179,009 | -13,703 | 34,983 |
| Interest expense | US$ in thousands | 2,188 | 4,220 | 9,368 | 5,440 | 618 |
| Interest coverage | 0.00 | 15.82 | -19.11 | -2.52 | 56.61 |
April 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $2,188K
= 0.00
The interest coverage ratio of AeroVironment Inc has demonstrated significant variability over the observed period, reflecting fluctuations in the company's ability to meet its interest obligations through its earnings before interest and taxes (EBIT).
As of April 30, 2021, the company exhibited a very strong interest coverage ratio of 56.61, indicating that its EBIT was substantially higher than its interest expenses, providing a significant margin of safety and suggesting robust financial health at that time.
However, by April 30, 2022, the interest coverage ratio dramatically declined to -2.52. The negative value indicates that the company's EBIT was insufficient to cover its interest expenses, likely due to a substantial decrease in earnings or increased interest costs, raising concerns about financial strain and the potential difficulty in servicing debt obligations.
This negative trend continued into April 30, 2023, with the ratio reaching -19.11. The further deterioration exemplifies worsening earnings capacity relative to interest expenses, which may signal operational or financial challenges, increased leverage, or other factors impairing profitability.
The situation showed some improvement by April 30, 2024, when the interest coverage ratio increased to 15.82. This positive value suggests that the company's earnings once again became sufficient to comfortably cover interest expenses, indicating a recovery in profitability or restructuring that improved financial stability.
Finally, as of April 30, 2025, the ratio stood at 0.00, indicating that EBIT was exactly equal to interest expenses, signifying a critical point where the company's earnings are just sufficient to cover its interest obligations, with no margin for error. This scenario could highlight ongoing pressure on profitability or potential risk exposure if earnings were to diminish further.
Overall, the interest coverage ratio trend for AeroVironment Inc reflects periods of strong financial capacity punctuated by episodes of substantial impairment, emphasizing the need for careful monitoring of operational performance and debt management strategies.
Peer comparison
Apr 30, 2025