Donaldson Company Inc (DCI)
Interest coverage
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 516,400 | 504,300 | 553,000 | 556,700 | 549,100 | 526,600 | 511,800 | 495,100 | 487,800 | 498,300 | 486,800 | 467,000 | 453,400 | 437,800 | 436,800 | 415,900 | 394,100 | 362,200 | 336,900 | 347,000 |
| Interest expense (ttm) | US$ in thousands | 24,200 | 22,400 | 21,700 | 21,400 | 21,400 | 21,000 | 21,100 | 20,100 | 19,100 | 18,300 | 17,000 | 16,000 | 14,900 | 13,900 | 13,300 | 13,000 | 13,100 | 13,900 | 15,100 | 16,300 |
| Interest coverage | 21.34 | 22.51 | 25.48 | 26.01 | 25.66 | 25.08 | 24.26 | 24.63 | 25.54 | 27.23 | 28.64 | 29.19 | 30.43 | 31.50 | 32.84 | 31.99 | 30.08 | 26.06 | 22.31 | 21.29 |
July 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $516,400K ÷ $24,200K
= 21.34
The interest coverage ratio of Donaldson Company Inc. demonstrates a generally stable but slightly declining trend over the analyzed period from October 31, 2020, to July 31, 2025.
Initially, at the end of October 2020, the ratio was notably high at 21.29, indicating that earnings before interest and taxes (EBIT) were more than twenty times greater than interest expense, reflecting strong capacity to meet interest obligations. Over the subsequent periods, the ratio increased, reaching a peak of 32.84 in January 2022, suggesting an even more robust margin of safety financially.
However, starting from early 2022, a gradual decline in the interest coverage ratio is observable. By October 2023, the ratio decreased to 24.63, and this downward trend continues into 2024 and 2025, with estimates around 21.34 to 22.51. Despite this decline, the ratio remains well above 1.0, which indicates that the company continues to generate sufficient earnings to comfortably cover interest expenses.
The consistent high ratio values across the timeline imply a strong and resilient ability to meet interest obligations, even as some margin of safety diminishes over time. The slight downward trajectory may reflect increased interest expenses, modest reductions in EBIT, or a combination thereof, but the ratios still suggest disciplined financial management and maintained solvency.
In summary, Donaldson Company Inc.'s interest coverage has historically been robust, demonstrating ample capacity to meet interest payments with a comfortable margin that persists over the analyzed period, although it exhibits a gradual decrease implying a potential need for ongoing monitoring of earnings relative to interest obligations.