The Clorox Company (CLX)
Interest coverage
| 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 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 1,283,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 99,000 |
| Interest coverage | 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 | 12.96 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,039,000K ÷ $87,000K
= 11.94
The interest coverage ratios for The Clorox Company over the specified periods reflect significant fluctuations, offering insights into the company's capacity to meet its interest obligations through its earnings.
From June 30, 2020, through December 31, 2021, the ratios remained relatively high, ranging from approximately 12.96 to 16.79, indicating a strong ability to service interest expenses during this period. These elevated levels suggest robust earnings relative to interest liabilities, likely attributable to solid operational performance and favorable business conditions.
Beginning in the first quarter of 2022, a noticeable decline in interest coverage ratios is observed. The ratio drops to 7.15, then to 6.67 and 6.35 in subsequent quarters, reaching a low of 2.40 in the third quarter of 2023. This downward trend signals increasing difficulty in covering interest expenses solely with earnings, possibly owing to rising debt levels, fluctuations in earnings, or both.
Post-September 2023, a recovery is visible, with interest coverage ratios rising again to 2.85 in December 2023, followed by further improvement to 5.14, 5.57, 7.21, 8.67, and finally reaching 11.94 in the first quarter of 2025. These increases indicate an enhancement in the company's EBIT relative to its interest obligations, suggesting improved earnings efficiency or reduced debt.
Overall, the company's interest coverage has experienced a notable decline from historically high levels in 2020-2021 to a low point in 2023, followed by a recommencement of positive trend into 2024 and early 2025. This pattern reflects periods of operational stress or increased leverage, with recent data pointing toward a recovery in earnings capacity and financial health.