Coty Inc (COTY)

Interest coverage

		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	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	515,200	630,000	776,200	804,300	950,900	576,000	487,600	518,000	665,500	898,300	831,400	226,400	-141,500	-1,116,100	-1,436,900	-1,210,900	-1,151,100	-3,010,300	-2,672,900	-3,474,600
Interest expense (ttm)	US$ in thousands	251,600	260,600	267,000	270,300	261,100	243,600	239,300	236,000	241,200	245,900	236,700	235,600	231,800	231,100	238,100	231,100	233,300	202,200	220,300	240,800
Interest coverage		2.05	2.42	2.91	2.98	3.64	2.36	2.04	2.19	2.76	3.65	3.51	0.96	-0.61	-4.83	-6.03	-5.24	-4.93	-14.89	-12.13	-14.43

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $515,200K ÷ $251,600K
= 2.05

The interest coverage ratio for Coty Inc has varied over the periods presented. Generally, an interest coverage ratio above 1 indicates that a company is generating enough operating income to cover its interest expenses.

Looking at the data, we can see that Coty Inc had positive interest coverage ratios for most periods, indicating that the company was able to comfortably cover its interest expenses. The ratios ranged from around 2 to 3.65 during the periods between Jun 30, 2022, and Jun 30, 2023, demonstrating a relatively stable ability to cover interest costs.

However, there were periods of decrease in interest coverage ratios, such as the sharp decline to 0.96 on Mar 31, 2022, and negative ratios in the subsequent quarters ending Dec 31, 2021, and Mar 31, 2021. This indicates a potential strain on the company's ability to cover interest expenses with its operating income during those periods.

It is important to note the significant negative interest coverage ratios recorded in the quarters ending Dec 31, 2020, Sep 30, 2020, and Jun 30, 2020, which suggest severe financial distress as the company's operating income was insufficient to cover its interest payments during those periods.

Overall, while Coty Inc's interest coverage has shown fluctuations, with periods of strong and weak performance, investors and stakeholders should monitor the company's ability to generate sufficient operating income to cover its interest expenses consistently to ensure financial stability and sustainability.