Donaldson Company Inc (DCI)

The interest coverage ratios for Donaldson Company Inc. over the specified periods indicate a generally strong capacity to meet interest obligations, although there is some variance observed across the years.

As of July 31, 2021, the interest coverage ratio was 30.31, reflecting that the company’s earnings before interest and taxes (EBIT) were more than thirty times the interest expenses, signifying a very comfortable margin of safety for debt servicing. The ratio slightly increased to 30.42 in the subsequent year ending July 31, 2022, maintaining a similarly high level of coverage, which demonstrates consistent financial stability and effective management of interest obligations during this period.

However, by July 31, 2023, the ratio experienced a moderate decline to 25.41, indicating a reduction in EBIT relative to interest expenses. Despite this decrease, the ratio remained well above the generally accepted threshold of 3 to 4 times, which signifies a strong ability to cover interest payments. The trend continued with the ratio slightly improving to 26.01 by July 31, 2024, suggesting some recovery or stability in earnings relative to interest obligations.

Nevertheless, by July 31, 2025, the interest coverage ratio declined again to 21.34. Although this figure is lower than previous years, it still signifies a comfortable buffer, as the ratio remains well above the critical threshold, implying that the company is capable of comfortably meeting its interest payments.

Overall, the data demonstrates that Donaldson Company Inc. maintains a consistently high interest coverage ratio, reflecting a solid financial position with sufficient earnings to cover interest expenses. The fluctuations observed are relatively moderate and do not suggest significant financial distress. The company’s ability to sustain high interest coverage ratios over multiple years indicates prudent financial management and a stable earnings outlook.