Capri Holdings Ltd (CPRI)
Interest coverage
| 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 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -241,000 | 262,000 | 376,000 | 528,000 | 679,000 | 838,000 | 933,000 | 876,000 | 903,000 | 645,000 | 481,000 | 439,000 | 19,000 | -378,000 | -340,000 | -418,000 | -192,000 | 384,000 | 469,000 | 584,000 |
| Interest expense (ttm) | US$ in thousands | 18,000 | 23,000 | 34,000 | 36,000 | 32,000 | 28,000 | 18,000 | 15,000 | 12,000 | 7,000 | 7,000 | 6,000 | 6,000 | 6,000 | 7,000 | 8,000 | 8,000 | 7,400 | 5,400 | 4,100 |
| Interest coverage | -13.39 | 11.39 | 11.06 | 14.67 | 21.22 | 29.93 | 51.83 | 58.40 | 75.25 | 92.14 | 68.71 | 73.17 | 3.17 | -63.00 | -48.57 | -52.25 | -24.00 | 51.89 | 86.85 | 142.44 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-241,000K ÷ $18,000K
= -13.39
Interest coverage ratio is a financial metric used to measure a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher ratio indicates that the company is more capable of servicing its debt obligations.
Analyzing Capri Holdings Ltd's interest coverage ratio over the provided period, we can see significant fluctuations. The interest coverage ratio has ranged from a low of -63.00 to a high of 142.44. A negative interest coverage ratio, such as -13.39 reported on Mar 31, 2024, indicates that the company's earnings were insufficient to cover its interest expenses during that period.
The trend in the interest coverage ratio for Capri Holdings Ltd shows variability over time. In recent periods, the company has generally shown a healthy interest coverage ratio above 1, which suggests that the company has sufficient earnings to cover its interest obligations. However, there have been instances of declining interest coverage ratios, notably the sharp drop from 92.14 on Dec 31, 2021, to 68.71 on Sep 30, 2021, indicating a potential deterioration in the company's ability to service its debt.
The interest coverage ratio's variability warrants further investigation into the factors contributing to the fluctuating earnings and interest expense levels for Capri Holdings Ltd. It is important for stakeholders to closely monitor the interest coverage ratio to assess the company's ability to manage its debt efficiently and avoid financial distress.
Peer comparison
Mar 31, 2024