Acuity Brands Inc (AYI)
Interest coverage
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 553,300 | 474,600 | 520,900 | 420,400 | 351,100 |
| Interest expense | US$ in thousands | 25,300 | 27,900 | 27,000 | 24,200 | 26,400 |
| Interest coverage | 21.87 | 17.01 | 19.29 | 17.37 | 13.30 |
August 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $553,300K ÷ $25,300K
= 21.87
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. In the case of Acuity Brands Inc, its interest coverage ratio has shown a generally improving trend over the past five years.
As of August 31, 2024, Acuity Brands Inc had an interest coverage ratio of 21.87, indicating that the company earned 21.87 times the amount needed to cover its interest expenses for that period. This demonstrates a strong ability to meet its interest obligations comfortably.
Comparing this to the previous years, we observe a steady improvement in the interest coverage ratio from 13.30 in 2020 to 21.87 in 2024. This indicates that the company's earnings have been consistently robust in relation to its interest obligations, reflecting a favorable financial position.
Overall, Acuity Brands Inc's increasing interest coverage ratio suggests a strong financial standing and signifies a lower financial risk associated with its debt obligations.
Peer comparison
Aug 31, 2024