Eagle Materials Inc (EXP)
Interest coverage
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 633,729 | 661,237 | 585,636 | 472,813 | 468,598 |
| Interest expense | US$ in thousands | 42,244 | 43,300 | 35,171 | 30,912 | 44,420 |
| Interest coverage | 15.00 | 15.27 | 16.65 | 15.30 | 10.55 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $633,729K ÷ $42,244K
= 15.00
The interest coverage ratio for Eagle Materials Inc has shown a positive trend over the past few years. As of March 31, 2021, the company had an interest coverage ratio of 10.55, indicating that it generated 10.55 times more operating income than it needed to cover its interest expenses.
Subsequently, the interest coverage ratio improved significantly to 15.30 as of March 31, 2022, and continued to strengthen to 16.65 by March 31, 2023. This suggests that the company's ability to meet its interest obligations improved substantially during these periods.
However, there was a slight decline in the interest coverage ratio to 15.27 as of March 31, 2024, which is still at a healthy level compared to the industry average.
Interestingly, as of March 31, 2025, the interest coverage ratio is reported as 0.00. This might indicate a potential issue with the company's ability to cover its interest expenses solely from its operating income. Further investigation is warranted to assess the reasons behind this significant decrease in the interest coverage ratio.
Overall, Eagle Materials Inc's interest coverage ratio has generally been strong, reflecting its ability to comfortably meet its interest obligations with its operating income. However, the sudden drop in the interest coverage ratio in 2025 requires closer scrutiny to understand any underlying issues impacting the company's financial health.