Brady Corporation (BRC)
Interest coverage
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 241,844 | 249,246 | 247,704 | 250,955 | 250,967 | 246,388 | 245,035 | 238,174 | 229,235 | 219,267 | 207,062 | 199,607 | 193,256 | 180,516 | 176,841 | 173,995 | 171,460 | 164,743 | 139,618 | 143,174 |
| Interest expense (ttm) | US$ in thousands | 4,747 | 4,446 | 4,238 | 3,716 | 3,126 | 2,937 | 2,962 | 3,411 | 3,539 | 3,399 | 2,975 | 1,988 | 1,276 | 912 | 714 | 513 | 437 | 478 | 975 | 1,571 |
| Interest coverage | 50.95 | 56.06 | 58.45 | 67.53 | 80.28 | 83.89 | 82.73 | 69.83 | 64.77 | 64.51 | 69.60 | 100.41 | 151.45 | 197.93 | 247.68 | 339.17 | 392.36 | 344.65 | 143.20 | 91.14 |
July 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $241,844K ÷ $4,747K
= 50.95
The interest coverage ratios for Brady Corporation over the specified periods demonstrate notable fluctuations, reflecting varying degrees of the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT).
From October 31, 2020, through October 31, 2021, the interest coverage ratio exhibited a significant upward trend, rising from 91.14 to a peak of 392.36. This indicates a substantial improvement in the company's capacity to service its interest commitments, likely attributable to increased earnings or reduced interest expenses during this period.
However, starting from November 2021, the ratio experienced a sharp decline, decreasing to 100.41 by October 31, 2022. The downward trend persisted into 2023, with the ratio reaching as low as approximately 64.51 in April 2023, suggesting a notable reduction in earnings relative to interest costs suggestive of increased financial leverage or decreased profitability.
In the subsequent periods, the interest coverage ratio showed signs of stabilization and slight recovery. From July 31, 2023, onward, the ratios hovered around the 65 to 83 range, with October 31, 2024, reporting a ratio of 67.53. These levels, while lower than historical highs, still imply that the company maintains a reasonable safety margin in covering its interest expenses, though the margin has narrowed compared to the peak levels observed in late 2020 and early 2021.
Overall, the data indicate a trajectory characterized by strong coverage in the early period, followed by a significant decline and partial stabilization in recent quarters. These dynamics suggest that Brady Corporation's interest coverage has been subject to notable variations, possibly driven by changes in earnings, interest costs, or both. The reduced coverage in the recent periods warrants attention from a financial stability perspective but remains above levels typically considered as indicating immediate financial distress.