Avnet Inc (AVT)
Interest coverage
| 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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 915,130 | 1,014,982 | 1,154,820 | 1,289,114 | 1,233,746 | 1,246,824 | 1,205,481 | 1,056,736 | 933,710 | 770,229 | 588,753 | 431,232 | 262,402 | 156,700 | -64,131 | -75,507 | -6,842 | -43,026 | 240,271 | 294,019 |
| Interest expense (ttm) | US$ in thousands | 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 | 122,741 | 132,063 | 138,598 | 138,412 |
| Interest coverage | 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 | -0.06 | -0.33 | 1.73 | 2.12 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $915,130K ÷ $282,868K
= 3.24
The interest coverage ratio for Avnet Inc has shown varying levels over the analyzed quarters. The trend indicates that from December 2019 to December 2020, there was a generally positive trend in the interest coverage ratio, indicating the company's ability to comfortably cover its interest payments with operating income. However, from September 2020 to March 2021, there was a sharp decline, with ratios indicating a potential strain on the company's ability to cover its interest expenses.
From September 2021 to September 2022, there was a notable recovery in the interest coverage ratio, with ratios consistently increasing during this period, suggesting an improvement in the company's ability to meet its interest payment obligations from its operating income. The ratios peaked in September 2022, indicating a strong ability to cover interest expenses.
From December 2022 onwards, the interest coverage ratio continued to decrease, albeit still at relatively healthy levels, implying a moderate decrease in the company's ability to cover interest payments. The ratio turned negative in the last two quarters, indicating that net income was not sufficient to cover interest expenses during those periods.
Overall, a declining trend in the interest coverage ratio from September 2022 to June 2023 followed by negative ratios in the last two quarters may raise concerns about Avnet Inc's ability to meet its interest payment obligations from operating income. Additional analysis of the company's financial health and cash flow position may be necessary to fully understand the implications of the observed trend in the interest coverage ratio.
Peer comparison
Jun 30, 2024