Cavco Industries Inc (CVCO)
Interest coverage
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 171,017 | 200,829 | 298,099 | 201,794 | 88,087 |
| Interest expense | US$ in thousands | 517 | 1,649 | 910 | 702 | 738 |
| Interest coverage | 330.79 | 121.79 | 327.58 | 287.46 | 119.36 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $171,017K ÷ $517K
= 330.79
Interest coverage ratio is a key financial metric that indicates a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio signifies that a company is more capable of servicing its debt with its operating income.
Analyzing Cavco Industries Inc's interest coverage ratio over the past five years reveals a positive trend. In March 2021, the company had an interest coverage ratio of 119.36, indicating that it generated operating income 119 times greater than its interest expenses. This ratio improved significantly in March 2022 to 287.46, reflecting a stronger ability to cover its interest obligations.
The trend continued to show improvement in the subsequent years. By March 2023, Cavco Industries Inc's interest coverage ratio had increased to 327.58, reaching even higher levels of financial health. However, in March 2024, there was a slight decrease in the ratio to 121.79, suggesting a temporary dip in the company's ability to cover interest expenses.
Fortunately, the company quickly rebounded, achieving a robust interest coverage ratio of 330.79 by March 2025. This ratio indicates that Cavco Industries Inc has a solid financial position, with ample operating income to comfortably meet its interest payments.
Overall, the upward trend in Cavco Industries Inc's interest coverage ratio over the past five years reflects the company's improving financial performance and ability to manage its debt obligations effectively.
Peer comparison
Mar 31, 2025