Ethan Allen Interiors Inc (ETD)
Interest coverage
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 77,991 | 87,053 | 100,516 | 115,897 | 137,196 | 890,616 | 894,481 | 893,704 | 881,414 | 120,367 | 106,701 | 92,964 | 77,285 | 40,776 | 21,035 | 7,684 | 14,644 | 22,442 | 33,865 | 40,789 |
| Interest expense (ttm) | US$ in thousands | 245 | 233 | 221 | 219 | 213 | 211 | 210 | 208 | 201 | 195 | 195 | 194 | 586 | 1,288 | 1,450 | 1,466 | 1,045 | 445 | 294 | 312 |
| Interest coverage | 318.33 | 373.62 | 454.82 | 529.21 | 644.11 | 4,220.93 | 4,259.43 | 4,296.65 | 4,385.14 | 617.27 | 547.18 | 479.20 | 131.89 | 31.66 | 14.51 | 5.24 | 14.01 | 50.43 | 115.19 | 130.73 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $77,991K ÷ $245K
= 318.33
Interest coverage measures a company's ability to meet its interest payments on debt using its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
Looking at the data for Ethan Allen Interiors Inc, the interest coverage ratio has fluctuated significantly over the past few quarters. The ratio was relatively stable and healthy from December 2019 to June 2023, ranging from around 450 to 650. However, there was a sharp decline in the ratio in the first quarter of 2023, dropping to 4,220.93, which is likely an anomaly or data error.
After this anomaly, the interest coverage ratio returned to a more reasonable range in the subsequent quarters. It peaked again in September 2023 at 529.21 and has since been showing an increasing trend. The most recent ratio as of June 2024 stands at 318.33, which is still a robust level indicating the company's ability to cover its interest payments multiple times over with its operating income.
Overall, the interest coverage ratio for Ethan Allen Interiors Inc demonstrates a generally healthy financial position, with some fluctuations in the data that may need further investigation for anomalies or underlying reasons. Monitoring this ratio over time will be crucial to ensure the company's continued ability to meet its debt obligations.