AZZ Incorporated (AZZ)
Interest coverage
| 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 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 343,896 | 222,550 | 169,053 | 88,380 | 58,162 | 53,488 | 74,819 | 118,050 | 113,071 | 103,973 | 103,209 | 79,142 | 60,323 | 34,128 | 39,704 | 60,665 | 78,353 | 99,809 | 88,098 | 84,539 |
| Interest expense (ttm) | US$ in thousands | 189,396 | 109,392 | 109,660 | 110,034 | 88,800 | 63,085 | 38,589 | 12,176 | 6,401 | 7,140 | 7,785 | 8,524 | 9,461 | 10,406 | 11,435 | 12,513 | 13,463 | 13,863 | 14,285 | 14,717 |
| Interest coverage | 1.82 | 2.03 | 1.54 | 0.80 | 0.65 | 0.85 | 1.94 | 9.70 | 17.66 | 14.56 | 13.26 | 9.28 | 6.38 | 3.28 | 3.47 | 4.85 | 5.82 | 7.20 | 6.17 | 5.74 |
February 29, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $343,896K ÷ $189,396K
= 1.82
Interest coverage ratio indicates the ability of AZZ Incorporated to meet its interest obligations from its operating income. Looking at the data provided, the interest coverage ratio has fluctuated over the periods.
In recent periods, such as Feb 29, 2024, and Nov 30, 2023, the interest coverage ratio improved significantly, indicating that the company's operating income was sufficient to cover its interest expenses more comfortably. This could be a positive sign of financial health.
However, in periods like May 31, 2023, and Feb 28, 2023, the interest coverage ratio was notably lower, suggesting that the company may have had difficulties in meeting its interest payments from its operating earnings during those times.
It is essential to note that an interest coverage ratio above 1 indicates that the company is generating enough income to cover interest expenses. An interest coverage ratio below 1 means that the company is not generating sufficient income to cover its interest payments, which could raise concerns about the company's financial stability and ability to service its debt.
In conclusion, the trend in AZZ Incorporated's interest coverage ratio shows variability, and it is crucial for investors and stakeholders to monitor this ratio over time to assess the company's ability to manage its debt obligations effectively.
Peer comparison
Feb 29, 2024