ESCO Technologies Inc (ESE)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 127,747 | 111,335 | 82,871 | 119,621 | 109,527 |
| Interest expense | US$ in thousands | 8,800 | 4,900 | 2,200 | 6,700 | 8,100 |
| Interest coverage | 14.52 | 22.72 | 37.67 | 17.85 | 13.52 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $127,747K ÷ $8,800K
= 14.52
The interest coverage ratio reflects Esco Technologies, Inc.'s ability to meet its interest payments on outstanding debt. The trend of the interest coverage ratio over the past five years indicates a strong ability to cover interest expenses. In 2023, the interest coverage ratio decreased to 14.78 from 22.88 in 2022, indicating a potential decrease in the company's ability to cover interest expenses using its earnings before interest and taxes. However, even with this decrease, the ratio is still at a healthy level, suggesting that Esco Technologies, Inc. continues to have significant earnings to cover its interest obligations. The 2023 ratio should be reviewed in conjunction with other financial metrics to gain a comprehensive understanding of the company's financial health.
Peer comparison
Sep 30, 2023