Caseys General Stores Inc (CASY)

Interest coverage

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 Jul 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 768,484 767,508 759,008 726,980 709,601 668,311 683,285 656,643 639,333 641,913 596,243 545,313 497,700 474,516 437,095 451,525 454,049 481,649 477,349 441,025
Interest expense (ttm) US$ in thousands 14,067 28,561 42,707 55,013 53,441 51,747 49,298 50,494 51,815 54,306 57,040 57,058 56,972 52,850 49,888 47,002 46,679 49,316 51,056 53,105
Interest coverage 54.63 26.87 17.77 13.21 13.28 12.91 13.86 13.00 12.34 11.82 10.45 9.56 8.74 8.98 8.76 9.61 9.73 9.77 9.35 8.30

April 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $768,484K ÷ $14,067K
= 54.63

The interest coverage ratios for Caseys General Stores Inc., spanning from July 31, 2020, to October 31, 2024, indicate a consistent trend of increasing capacity to cover interest expenses with operating earnings. During this period, the ratio improved from 8.30 in July 2020 to a preliminary value of 17.77 in October 2024. This upward trajectory demonstrates a strengthening ability of the company to meet its debt obligations through its operating income, suggesting enhanced financial stability and decreasing relative risk associated with interest payments.

Notably, the ratio experienced gradual increases over the years, with a significant acceleration observed in the most recent quarters. The ratio rose from approximately 8.30 at the end of July 2020 to over 13 by the end of 2023, and further surged to nearly 17.77 by October 2024. The sharpest increases are observed in the last year, with the ratio nearly doubling and reaching a level of 26.87 by January 2025, and 54.63 projected for April 2025. This indicates that the company's operating income has grown substantially relative to its interest expenses, signaling improved profitability and operational efficiency.

Overall, the increasing trend in the interest coverage ratio reflects positively on the company's ability to service its debt, and suggests a period of improved financial health and lower leverage-related risks. The substantial projected increases in the near future imply stronger earnings capacity and potentially more conservative or reduced interest-related risks.