Donaldson Company Inc (DCI)
Interest coverage
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 544,100 | 487,900 | 453,300 | 394,000 | 352,600 |
| Interest expense | US$ in thousands | 21,400 | 19,200 | 14,900 | 13,000 | 17,400 |
| Interest coverage | 25.43 | 25.41 | 30.42 | 30.31 | 20.26 |
July 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $544,100K ÷ $21,400K
= 25.43
Donaldson Company Inc has maintained a consistently strong interest coverage ratio over the past five years, reflecting its ability to comfortably meet its interest payment obligations. The interest coverage ratio has ranged from 20.26 to 30.42 during this period, indicating a solid financial position and profitability. A higher interest coverage ratio suggests that the company generates sufficient earnings to cover its interest expenses multiple times over. The stable and high interest coverage ratio implies that Donaldson Company Inc has a lower risk of defaulting on its debt obligations and is well-positioned to handle fluctuations in interest rates. Overall, the company's strong interest coverage ratio demonstrates sound financial management and a healthy balance sheet.