Calavo Growers Inc (CVGW)
Interest coverage
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 93 | -1,312 | -273 | -17,040 | 50,476 |
| Interest expense | US$ in thousands | 2,495 | 1,686 | 798 | 877 | 948 |
| Interest coverage | 0.04 | -0.78 | -0.34 | -19.43 | 53.24 |
October 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $93K ÷ $2,495K
= 0.04
The interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. A higher ratio indicates a greater ability to cover interest expenses.
Looking at Calavo Growers, Inc's interest coverage ratio, we see a significant decline from 6.39 in 2022 to 1.42 in 2023. This suggests a decreased ability to cover interest expenses with operating income. The ratio of -2.10 in 2021 indicates that the company's operating income was insufficient to cover its interest expenses during that period. This negative ratio raises concerns about the company's financial health and its ability to meet debt obligations.
The absence of data for 2020 and 2019 limits our ability to track the trend of the interest coverage ratio over a longer period. However, based on the available data, the substantial fluctuation in the interest coverage ratio indicates potential volatility in Calavo Growers, Inc's ability to manage its interest expenses. Further examination of the company's financial and operational performance is warranted to understand the factors contributing to these fluctuations and to assess the company's overall financial stability.