Coty Inc (COTY)

Interest coverage

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	546,700	950,900	665,500	-141,500	-1,151,100
Interest expense	US$ in thousands	251,600	261,100	241,200	231,800	233,300
Interest coverage		2.17	3.64	2.76	-0.61	-4.93

June 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $546,700K ÷ $251,600K
= 2.17

The interest coverage ratio for Coty Inc has shown variability over the past five years. In 2024, the interest coverage ratio stood at 2.17, indicating that the company generated operating income 2.17 times greater than its interest expenses. This shows a decline from the previous year's ratio of 3.64.

Further back, in 2022 and 2023, Coty Inc's interest coverage ratios were 2.76 and 3.64 respectively, demonstrating an ability to comfortably cover interest payments with operating income.

However, there were concerning figures in 2021 and 2020, where the company's interest coverage ratios were -0.61 and -4.93 respectively. A negative interest coverage ratio indicates that the company's operating income was insufficient to cover its interest expenses, raising questions about its financial stability during those years.

Overall, while Coty Inc has shown improvements in its interest coverage ratio in recent years, investors should closely monitor this metric to ensure that the company remains capable of meeting its interest obligations.