Concentrix Corporation (CNXC)

Interest coverage

		Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	651,208	655,911	398,818	473,170	463,097	448,179	397,341	389,055	377,388	361,994	362,377	340,459	309,255	292,609	548,783	473,574	370,571	330,486	312,333	315,388
Interest expense (ttm)	US$ in thousands	312,383	321,828	316,219	284,697	249,453	201,004	158,557	129,536	95,296	70,076	45,745	30,341	24,113	23,046	28,114	32,248	38,431	48,313	59,741	50,739
Interest coverage		2.08	2.04	1.26	1.66	1.86	2.23	2.51	3.00	3.96	5.17	7.92	11.22	12.83	12.70	19.52	14.69	9.64	6.84	5.23	6.22

February 28, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $651,208K ÷ $312,383K
= 2.08

Concentrix Corporation's interest coverage ratio has shown fluctuations over the period from November 30, 2021, to February 28, 2025. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.

In November 2021 and February 2022, the interest coverage was relatively strong at 24.84 and 24.27, respectively, suggesting that Concentrix was comfortably able to cover its interest expenses with its operating income.

However, there was a decline in the interest coverage ratio in subsequent periods. By May 2022, the ratio decreased to 20.23, and it continued to drop to 13.56 by August 2022, indicating a potential strain on the company's ability to cover its interest obligations.

The trend of declining interest coverage continued into the following periods, reaching a low of 5.05 in May 2023. This may raise concerns about Concentrix's ability to service its debt obligations adequately.

There was a slight improvement in the interest coverage ratio in the subsequent periods, with ratios ranging from 6.65 to 26.81. While the ratio improved, it remained below the levels seen in the earlier periods.

The ratio spiked significantly to 91.01 in May 2024, suggesting a substantial increase in Concentrix's ability to cover its interest payments. This spike could be due to various factors such as increased operating income or reduced interest expenses.

By February 2025, the interest coverage ratio decreased to 24.65, still at a relatively healthy level compared to the lows witnessed in the previous periods.

Overall, the fluctuations in Concentrix Corporation's interest coverage ratio indicate varying levels of financial health and the company's ability to manage its debt obligations over the analyzed period.