Carpenter Technology Corporation (CRS)

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	264,500	218,800	234,300	186,800	126,600	82,800	47,200	1,600	-18,200	-106,800	-158,000	-220,800	-256,600	-331,000	-227,900	-84,400	25,900	238,400	258,700	255,100
Interest expense (ttm)	US$ in thousands	52,600	52,600	54,200	54,200	54,100	53,500	50,200	47,300	44,900	40,700	38,400	36,200	32,700	27,700	23,700	21,100	19,800	21,300	23,500	25,200
Interest coverage		5.03	4.16	4.32	3.45	2.34	1.55	0.94	0.03	-0.41	-2.62	-4.11	-6.10	-7.85	-11.95	-9.62	-4.00	1.31	11.19	11.01	10.12

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $264,500K ÷ $52,600K
= 5.03

The interest coverage ratio for Carpenter Technology Corporation has shown significant fluctuations over the past few quarters. The ratio indicates the company's ability to cover its interest expenses with its operating income.

In the most recent quarter, as of June 30, 2024, the interest coverage ratio stood at 5.03. This suggests that the company was able to cover its interest expenses over 5 times with its operating income, which is considered a healthy level and indicates a strong ability to meet its interest obligations.

Looking back at the historical trend, the interest coverage ratio has generally been improving since the end of 2020. However, there were periods of significant decline, such as in the last quarter of 2021 where the ratio dropped to -11.95, indicating a concerning inability to cover interest expenses with operating income.

It is important to note that negative interest coverage ratios, such as those seen in the past, could be a red flag for investors and creditors as they indicate that the company's operating income is insufficient to cover its interest expenses.

Overall, while the recent interest coverage ratio of 5.03 shows a positive trend, investors and creditors should pay attention to the company's ability to maintain and improve this ratio in order to ensure financial stability and viability in the long term.