Central Garden & Pet Company A (CENTA)
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 earnings before interest and taxes (EBIT). A higher ratio indicates that the company is more capable of servicing its debt. Central Garden & Pet Co.'s interest coverage ratio has ranged from 4.24 to 4.95 over the past five years. This indicates that the company has consistently generated earnings that are more than four times its interest expenses, demonstrating a strong ability to meet its interest payments. The slight fluctuations in the ratio suggest that the company's profitability has remained relatively stable over the years, with sufficient earnings to cover its interest obligations. Overall, the consistent and relatively high interest coverage ratio reflects Central Garden & Pet Co.'s ability to manage its debt and indicates financial stability.
Peer comparison
Sep 30, 2023