The Clorox Company (CLX)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 740,000 | 1,039,000 | 746,000 | 649,000 | 501,000 | 463,000 | 262,000 | 251,000 | 355,000 | 254,000 | 692,000 | 654,000 | 707,000 | 672,000 | 415,000 | 655,000 | 994,000 | 1,288,000 | 1,645,000 | 1,549,000 |
| Interest expense (ttm) | US$ in thousands | 88,000 | 87,000 | 86,000 | 90,000 | 90,000 | 90,000 | 92,000 | 89,000 | 90,000 | 106,000 | 103,000 | 103,000 | 106,000 | 94,000 | 98,000 | 99,000 | 99,000 | 99,000 | 98,000 | 99,000 |
| Interest coverage | 8.41 | 11.94 | 8.67 | 7.21 | 5.57 | 5.14 | 2.85 | 2.82 | 3.94 | 2.40 | 6.72 | 6.35 | 6.67 | 7.15 | 4.23 | 6.62 | 10.04 | 13.01 | 16.79 | 15.65 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $740,000K ÷ $88,000K
= 8.41
The analysis of The Clorox Company's interest coverage ratios over the specified periods reveals significant fluctuations, indicating variations in the company's ability to meet interest obligations from its earnings before interest and taxes (EBIT).
Between September 2020 and December 2020, the interest coverage ratio increased from 15.65 to 16.79, reflecting a strong capacity to cover interest expenses. However, a notable decline commenced thereafter, with the ratio decreasing to 13.01 by March 2021 and further to 10.04 by June 2021. This downward trend continued into September 2021 at a ratio of 6.62 and dropped sharply to 4.23 by the end of 2021, indicating reduced earnings relative to interest obligations.
The first quarter of 2022 saw an increase to 7.15, suggesting some recovery, although the ratio remained below pre-2021 levels. During 2022, the interest coverage remained relatively stable, fluctuating between approximately 6.35 and 6.72. Notably, a significant decline reemerged by March 2023, with the ratio falling to 2.40, signaling heightened difficulty in covering interest expenses solely from operating earnings.
Subsequent periods during 2023 showed modest improvements, with ratios rising to 3.94 in June and 2.82 in September. Slight improvements persisted in late 2023 and into 2024, with ratios reaching 2.85 in December 2023, then increasing to 5.14 in the first quarter of 2024, and continuing upward through June and September 2024, achieving 7.21 and 8.67, respectively.
Projections for 2025 indicate further strengthening, with interest coverage ratios at 11.94 in the first quarter and 8.41 by the second quarter of 2025. These increases suggest an improving ability of the company to generate sufficient earnings to meet interest obligations, although previous periods exhibited considerable volatility.
Overall, the trend reflects a period of elevated interest coverage ratios in 2020, a sharp decline throughout 2021 and parts of 2022, followed by gradual improvement starting in late 2023 and into 2024. This pattern underscores periods of financial stress interspersed with recovery phases, highlighting the importance of continued operational stability for maintaining favorable interest coverage levels.