Enerpac Tool Group Corp (EPAC)
Interest coverage
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 115,824 | 100,275 | 83,922 | 64,846 | 46,050 | 36,562 | 30,660 | 31,123 | 47,227 | 48,450 | 51,112 | 40,766 | 16,021 | 18,881 | 24,181 | 26,388 | 66,565 | 70,437 | 47,514 | 35,101 |
| Interest expense (ttm) | US$ in thousands | 13,877 | 13,271 | 12,389 | 10,889 | 8,590 | 6,240 | 4,386 | 3,537 | 3,926 | 4,509 | 5,264 | 7,701 | 10,913 | 14,205 | 19,218 | 22,474 | 25,177 | 27,700 | 28,266 | 30,320 |
| Interest coverage | 8.35 | 7.56 | 6.77 | 5.96 | 5.36 | 5.86 | 6.99 | 8.80 | 12.03 | 10.75 | 9.71 | 5.29 | 1.47 | 1.33 | 1.26 | 1.17 | 2.64 | 2.54 | 1.68 | 1.16 |
February 29, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $115,824K ÷ $13,877K
= 8.35
The interest coverage ratio for Enerpac Tool Group Corp has shown some volatility over the past few quarters. The ratio indicates the company's ability to meet its interest payment obligations using its operating income. A higher interest coverage ratio implies that the company is more capable of servicing its debt.
Looking at the data provided, we observe that the interest coverage ratio has generally remained above 5, which is considered a healthy level indicating the company's ability to cover its interest expenses. However, there are fluctuations in the ratio, with some quarters showing higher ratios (e.g., 12.03, 10.75, 8.80), indicating improved ability to cover interest payments, and other quarters showing lower ratios (e.g., 1.47, 1.33, 1.26, 1.17, 1.16), which may raise concerns about the company's ability to service its debt.
It is essential for investors and creditors to monitor the trend of the interest coverage ratio over time to assess the company's financial health and its ability to manage its debt obligations effectively. Additionally, a declining trend in the interest coverage ratio may signal potential financial distress and the need for closer scrutiny of the company's debt management strategies.
Peer comparison
Feb 29, 2024