AeroVironment Inc (AVAV)
Interest coverage
| Apr 30, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 30, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | Apr 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | Apr 30, 2020 | Jul 27, 2019 | Apr 30, 2019 | Oct 27, 2018 | Jul 28, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 71,824 | -99,803 | -109,530 | -149,022 | -178,663 | 32 | -18,701 | -1,048 | -9,887 | -5,140 | 22,884 | 31,842 | 65,250 | 66,385 | 57,630 | 51,977 | 44,880 | 53,852 | 48,868 | 52,755 |
| Interest expense (ttm) | US$ in thousands | 1,009 | 849 | 847 | 848 | 845 | 1,037 | 953 | 871 | 789 | 1,421 | 1,408 | 1,487 | 2,469 | 2,763 | 4,074 | 4,934 | 4,729 | 4,151 | 3,270 | 2,634 |
| Interest coverage | 71.18 | -117.55 | -129.32 | -175.73 | -211.44 | 0.03 | -19.62 | -1.20 | -12.53 | -3.62 | 16.25 | 21.41 | 26.43 | 24.03 | 14.15 | 10.53 | 9.49 | 12.97 | 14.94 | 20.03 |
April 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $71,824K ÷ $1,009K
= 71.18
Interest coverage ratio measures a company's ability to meet its interest obligations with its operating earnings. A higher ratio indicates a stronger ability to cover interest expenses.
Analyzing AeroVironment Inc's interest coverage over the past several quarters reveals fluctuations in the company's ability to cover its interest expenses. In some periods, such as April 2024, the interest coverage ratio was notably high at 71.18, indicating a strong ability to meet interest obligations. However, in other periods, including January 2024, October 2023, and July 2023, the ratios were negative, implying that the company's operating earnings were insufficient to cover its interest expenses.
This fluctuation in interest coverage may indicate variability in the company's profitability and cash flow generation. Negative interest coverage ratios are concerning as they suggest potential financial distress and a heightened risk of default on interest payments. On the other hand, positive ratios reflect a healthier financial position and the ability to comfortably cover interest costs.
It is essential for investors and analysts to closely monitor AeroVironment Inc's interest coverage ratio to assess the company's financial health and ability to service its debt obligations effectively. Further analysis and consideration of the underlying factors impacting the company's earnings and expenses are necessary to gain a comprehensive understanding of its financial performance and stability.
Peer comparison
Apr 30, 2024