AZZ Incorporated (AZZ)
Interest coverage
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 251,965 | 237,168 | 177,475 | 79,394 | 60,645 |
| Interest expense | US$ in thousands | 81,282 | 107,065 | 88,800 | 6,395 | 9,648 |
| Interest coverage | 3.10 | 2.22 | 2.00 | 12.42 | 6.29 |
February 28, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $251,965K ÷ $81,282K
= 3.10
The interest coverage ratio, a measure of a company's ability to meet its interest payments on outstanding debt, presents varying trends for AZZ Incorporated over the years:
- As of February 28, 2021, the interest coverage ratio stood at 6.29, indicating that the company generated more than six times the earnings necessary to cover its interest expenses.
- By February 28, 2022, the interest coverage had improved significantly to 12.42, suggesting a stronger ability to meet interest obligations with earnings more than twelve times the interest expenses.
- However, by February 28, 2023, the interest coverage ratio decreased to 2.00, signaling a decline in the company's ability to cover interest payments with earnings only double the interest expenses.
- This trend continued into February 29, 2024, with an interest coverage ratio of 2.22, slightly improving but still reflecting a relatively tight ability to cover interest costs.
- As of February 28, 2025, the interest coverage ratio increased to 3.10, showing some improvement compared to the previous year but remaining below the ideal level.
The fluctuation in the interest coverage ratios indicates the varying levels of financial health and risk associated with AZZ Incorporated's debt servicing capabilities over the years. It is essential for stakeholders to monitor this metric closely to assess the company's ability to meet its debt obligations efficiently.
Peer comparison
Feb 28, 2025