Avnet Inc (AVT)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 496,971 | 599,571 | 635,756 | 711,226 | 917,904 | 1,016,571 | 1,156,409 | 1,289,113 | 1,233,745 | 1,246,824 | 1,205,481 | 1,056,736 | 933,710 | 770,228 | 588,752 | 431,231 | 262,401 | 156,700 | -64,131 | -75,507 |
| Interest expense (ttm) | US$ in thousands | 246,402 | 252,232 | 264,613 | 276,516 | 282,868 | 293,650 | 291,849 | 276,567 | 250,869 | 205,800 | 160,019 | 122,629 | 100,375 | 93,733 | 90,161 | 90,016 | 89,473 | 91,616 | 98,992 | 111,411 |
| Interest coverage | 2.02 | 2.38 | 2.40 | 2.57 | 3.24 | 3.46 | 3.96 | 4.66 | 4.92 | 6.06 | 7.53 | 8.62 | 9.30 | 8.22 | 6.53 | 4.79 | 2.93 | 1.71 | -0.65 | -0.68 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $496,971K ÷ $246,402K
= 2.02
The interest coverage ratios for Avnet Inc. over the period from September 2020 to June 2025 exhibit notable fluctuations, reflecting variations in the company's ability to meet its interest obligations.
In September 2020 and December 2020, the ratios were negative at -0.68 and -0.65, respectively, indicating that the company was incurring losses or had insufficient operating earnings to cover interest expenses. Such negative values suggest financial stress or significant losses during that period.
From March 2021 onward, there was a marked improvement, with the interest coverage ratio turning positive, reaching 1.71. This upward trend continued robustly through 2021 and into 2022, peaking at 9.30 in June 2022. During this period, Avnet's operating income was sufficient not only to cover interest expenses but did so comfortably, indicating a period of strong financial performance.
Subsequently, the ratios experienced a gradual decline, though remaining positive, with September 2022 reporting 8.62, and further decreasing to 7.53 in December 2022. The downward trend persisted into 2023, with ratios of 6.06 in March, 4.92 in June, and 4.66 in September of 2023. This indicates a gradual erosion in the company's ability to cover interest expenses, though it continued to meet obligations comfortably.
The decline continued into 2024, with ratios dropping to 3.96 in December 2023, and further down to 3.46 in March 2024, 3.24 in June 2024, and 2.57 in September 2024. The ratios approaching closer to 1 suggest increasing financial pressure, but they still reflect satisfactory coverage.
Continuing into the first half of 2025, the ratios further declined to 2.40 in December 2024, 2.38 in March 2025, and reached 2.02 in June 2025. While these figures indicate a decreasing trend in interest coverage, they remain above 2, which typically signifies a moderate cushion for covering interest obligations.
Overall, the data reveals that Avnet Inc. experienced a period of financial distress at the outset, with negative coverage ratios, followed by substantial improvement and sustained periods of strong coverage through mid-2022. Since then, a gradual and steady decline has been observed, though ratios still suggest adequate capacity to service interest, albeit with diminishing margin.
Peer comparison
Jun 30, 2025