Central Garden & Pet Company A (CENTA)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 198,622 | 219,016 | 256,639 | 252,378 | 196,910 |
| Interest expense | US$ in thousands | 57,527 | 57,025 | 58,253 | 58,597 | 44,016 |
| Interest coverage | 3.45 | 3.84 | 4.41 | 4.31 | 4.47 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $198,622K ÷ $57,527K
= 3.45
The interest coverage ratio for Central Garden & Pet Company A has been on a slight decline over the past five years, moving from 4.47 in 2020 to 3.45 in 2024. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over the period.
A ratio above 1 indicates that the company is generating enough earnings to cover its interest payments. Despite the declining trend, Central Garden & Pet Company A's interest coverage ratios for all years are above 1, suggesting that the company has been able to meet its interest obligations comfortably.
It is essential for investors and creditors to monitor this ratio closely, as a declining trend could indicate a deteriorating financial health and a potential inability to meet debt obligations in the future. The company should focus on improving its earnings or managing its debt levels to strengthen its interest coverage ratio in the coming years.
Peer comparison
Sep 30, 2024