Acuity Brands Inc (AYI)
Interest coverage
| Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 563,700 | 518,100 | 517,800 | 510,800 | 474,600 | 519,800 | 519,400 | 506,900 | 520,900 | 495,700 | 466,700 | 451,200 | 420,400 | 391,100 | 360,100 | 352,500 | 351,100 | 378,500 | 414,800 | 428,600 |
| Interest expense (ttm) | US$ in thousands | 25,300 | 25,300 | 25,300 | 26,400 | 27,900 | 29,600 | 29,900 | 28,700 | 27,000 | 25,000 | 24,800 | 25,300 | 24,200 | 22,900 | 22,600 | 22,500 | 26,400 | 30,900 | 33,900 | 36,200 |
| Interest coverage | 22.28 | 20.48 | 20.47 | 19.35 | 17.01 | 17.56 | 17.37 | 17.66 | 19.29 | 19.83 | 18.82 | 17.83 | 17.37 | 17.08 | 15.93 | 15.67 | 13.30 | 12.25 | 12.24 | 11.84 |
August 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $563,700K ÷ $25,300K
= 22.28
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is better positioned to cover its interest expenses.
Acuity Brands Inc's interest coverage ratio has shown a generally increasing trend over the periods from Nov 2019 to Aug 2024, with the ratio ranging from 11.84 to 22.28 during this timeframe. This indicates that Acuity Brands Inc has been able to generate sufficient operating income to cover its interest expenses comfortably.
The interest coverage ratio consistently stayed above 1, signaling that the company's operating income was consistently more than sufficient to cover its interest payments. This is a positive sign, as it reflects Acuity Brands Inc's financial stability and ability to service its debt obligations.
The increasing trend in the interest coverage ratio can be viewed positively by investors and creditors, as it demonstrates the company's improving ability to cover interest expenses. It suggests that Acuity Brands Inc has been effectively managing its debt and generating enough income to meet its financial obligations.
Overall, based on the data provided, Acuity Brands Inc appears to have a strong interest coverage ratio, indicating a healthy financial position and the ability to meet its interest payments comfortably.
Peer comparison
Aug 31, 2024