Ethan Allen Interiors Inc (ETD)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 52,545 | 74,592 | 76,567 | 77,834 | 77,914 | 86,498 | 100,245 | 115,665 | 133,476 | 145,170 | 149,505 | 148,924 | 138,885 | 121,644 | 108,571 | 95,646 | 80,335 | 42,804 | 22,683 | 8,731 |
| Interest expense (ttm) | US$ in thousands | 183 | 251 | 255 | 244 | 245 | 233 | 221 | 219 | 213 | 211 | 210 | 208 | 201 | 195 | 195 | 194 | 586 | 1,288 | 1,322 | 1,326 |
| Interest coverage | 287.13 | 297.18 | 300.26 | 318.99 | 318.02 | 371.24 | 453.60 | 528.15 | 626.65 | 688.01 | 711.93 | 715.98 | 690.97 | 623.82 | 556.77 | 493.02 | 137.09 | 33.23 | 17.16 | 6.58 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $52,545K ÷ $183K
= 287.13
The analysis of Ethan Allen Interiors Inc.'s interest coverage ratios over the specified periods reveals notable fluctuations, illustrating the company's varying ability to meet its interest obligations through its earnings before interest and taxes (EBIT).
From September 30, 2020, to June 30, 2021, the interest coverage ratio exhibits a rapid and substantial increase, starting at 6.58 and reaching 137.09, respectively. This sharp rise indicates a significant improvement in the company's earnings relative to its interest expenses, reflecting enhanced profitability or reduced interest obligations during this period.
Subsequently, the ratio peaks dramatically at 715.98 on September 30, 2021, and remains at elevated levels through December 2021 and into the first half of 2022, with ratios of 711.93 and 690.97, respectively. Such elevated figures suggest a very strong capacity to cover interest payments during this period, potentially indicative of robust earnings, substantial reductions in debt, or both.
However, from the third quarter of 2022 onward, a downward trend emerges. The ratio declines to 715.98 in September 2022, then continues decreasing through subsequent periods, reaching 453.60 by December 2023. This decline signifies a diminishing margin of safety in covering interest expenses, potentially due to a reduction in earnings or increased interest obligations.
The trend persists into 2024 and 2025, with the ratios approaching and stabilizing around the low 300s—specifically, values such as 318.02, 318.99, and 300.26, respectively. The gradual decline in interest coverage indicates that while the company still maintains the ability to meet interest payments, its margin of safety has diminished compared to earlier periods.
Overall, the company's interest coverage ratios exhibit a volatile pattern characterized by a significant initial improvement followed by a sustained decline, though remaining above critical thresholds for debt serviceability. Continuous monitoring of these ratios is warranted to assess future liquidity and financial stability, especially considering the downward trend observed in recent periods.
Peer comparison
Jun 30, 2025