Avnet Inc (AVT)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 915,130 | 1,233,740 | 933,709 | 262,402 | -6,843 |
| Interest expense | US$ in thousands | 282,867 | 250,869 | 100,375 | 89,473 | 122,742 |
| Interest coverage | 3.24 | 4.92 | 9.30 | 2.93 | -0.06 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $915,130K ÷ $282,867K
= 3.24
Avnet Inc's interest coverage ratio has shown variations over the past five years. In 2024, the interest coverage ratio stood at 3.24, indicating that the company generated enough earnings before interest and taxes (EBIT) to cover its interest expenses. This suggests a moderate ability to meet interest obligations from operating profits.
Compared to the previous year, there was a decline in the interest coverage ratio from 4.92 in 2023 to 3.24 in 2024. This may raise concerns about the company's ability to cover its interest payments using its operating income.
In 2022, Avnet Inc had a relatively high interest coverage ratio of 9.30, suggesting a strong ability to meet interest payments comfortably. This was an improvement from the lower ratios in the preceding years.
The interest coverage ratio was 2.93 in 2021, indicating that the company's EBIT was almost three times its interest expenses, reflecting a reasonable level of financial health and ability to meet interest obligations.
In 2020, Avnet Inc had a negative interest coverage ratio of -0.06, which implies that the company's EBIT was not sufficient to cover its interest expenses during that period. This may raise concerns about the company's financial position and ability to service its debt.
Overall, fluctuations in Avnet Inc's interest coverage ratio over the years reflect the company's varying ability to meet interest payments with its operating profits. It is important for stakeholders to monitor this ratio consistently to assess the company's financial health and debt repayment capacity.
Peer comparison
Jun 30, 2024