ESCO Technologies Inc (ESE)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 145,089 | 127,747 | 111,335 | 82,871 | 119,621 |
| Interest expense | US$ in thousands | 15,200 | 8,800 | 4,900 | 2,200 | 6,700 |
| Interest coverage | 9.55 | 14.52 | 22.72 | 37.67 | 17.85 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $145,089K ÷ $15,200K
= 9.55
The interest coverage ratio of ESCO Technologies Inc has displayed varying trends over the past five years, as shown in the table. The ratio stood at 9.55 in 2024, indicating the company generated operating profits nearly 9.55 times higher than its interest expenses for that year. Although this ratio represents a decrease from the previous year's value of 14.52, it still suggests a healthy ability to service its debt obligations.
In 2023, ESCO Technologies Inc exhibited a robust interest coverage ratio of 14.52, reflecting its capacity to cover interest payments with operating profits over 14 times. The company's financial flexibility and ability to meet interest expenses were further emphasized in 2022, with an interest coverage ratio of 22.72, indicating a strong financial position.
The trend continues with an even higher interest coverage ratio of 37.67 in 2021, suggesting ESCO Technologies Inc's resilience and strong cash flow generation relative to its interest expenses. However, there was a notable decline in 2020, with the interest coverage ratio dropping to 17.85, although it still demonstrated a healthy ability to cover interest costs.
Overall, ESCO Technologies Inc has shown a historically solid ability to service its interest payments, with fluctuations in the interest coverage ratio possibly reflective of changes in operating profits, interest expenses, or a combination of both factors. Further analysis of the company's financial performance and debt management practices may provide additional insights into its interest coverage dynamics.
Peer comparison
Sep 30, 2024