Enerpac Tool Group Corp (EPAC)
Interest coverage
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 121,587 | 83,922 | 30,660 | 51,113 | 24,181 |
| Interest expense | US$ in thousands | 13,524 | 12,389 | 4,386 | 5,266 | 19,218 |
| Interest coverage | 8.99 | 6.77 | 6.99 | 9.71 | 1.26 |
August 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $121,587K ÷ $13,524K
= 8.99
Over the past five years, Enerpac Tool Group Corp's interest coverage ratio has exhibited fluctuations. The interest coverage ratio measures the company's ability to pay interest expenses on outstanding debt with its operating income.
In 2020, the interest coverage ratio was notably low at 1.26, indicating that the company's operating income was only sufficient to cover its interest payments marginally. However, this ratio improved significantly in the following years, reaching 9.71 in 2021, reflecting a more comfortable ability to cover interest expenses.
Subsequently, in 2022 and 2023, the interest coverage ratio remained relatively stable around 6.99 and 6.77, respectively. While these ratios indicate that the company's operating income continued to exceed its interest expenses, the coverage was not as robust as in 2021.
The most recent data point from 2024 shows a slight decrease in the interest coverage ratio to 8.99, suggesting that the company's ability to cover interest payments may have slightly weakened compared to the previous year but remains at a healthy level overall.
In conclusion, Enerpac Tool Group Corp's interest coverage ratio has shown variability over the past five years, with fluctuations indicating changes in the company's ability to meet its interest obligations from its operating income.
Peer comparison
Aug 31, 2024