Central Garden & Pet Company (CENT)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 219,016 | 256,639 | 252,378 | 196,910 | 162,004 |
| Interest expense | US$ in thousands | 57,025 | 58,253 | 58,597 | 44,016 | 42,614 |
| Interest coverage | 3.84 | 4.41 | 4.31 | 4.47 | 3.80 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $219,016K ÷ $57,025K
= 3.84
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. Central Garden & Pet Co.'s interest coverage has remained relatively stable over the past five years, ranging from 4.24 to 4.95. This indicates that the company has consistently generated operating income at least four times greater than its interest expenses.
The consistent interest coverage ratio above 4 suggests that Central Garden & Pet Co. has a comfortable buffer to handle its interest payments. However, investors and creditors may closely monitor any significant changes in this ratio, as a declining trend could indicate potential challenges in meeting interest obligations. Overall, the company's interest coverage ratio reflects a solid ability to service its debt through its operating profits.
Peer comparison
Sep 30, 2023