Eagle Materials Inc (EXP)
Interest coverage
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 660,194 | 623,764 | 505,967 | 473,810 | 133,819 |
| Interest expense | US$ in thousands | 42,257 | 35,171 | 30,873 | 44,420 | 38,421 |
| Interest coverage | 15.62 | 17.74 | 16.39 | 10.67 | 3.48 |
March 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $660,194K ÷ $42,257K
= 15.62
The interest coverage ratio for Eagle Materials Inc has exhibited a generally positive trend over the last five years, indicating the company's ability to meet its interest obligations comfortably.
In the most recent fiscal year ending March 31, 2024, the interest coverage ratio stood at 15.62, which implies that the company generated operating income 15.62 times greater than its interest expense. This represents a slight decrease from the previous year's ratio of 17.74 but remains at a healthy level.
The upward trend in interest coverage from 2020 (3.48) to 2023 (17.74) reflects an improvement in the company's financial health and stability. The significant increase in the ratio during this period suggests that Eagle Materials Inc has been effectively managing its interest costs and generating sufficient operating income to cover its financial obligations.
The latest ratio of 15.62 indicates that the company remains well-positioned to meet its interest payments and indicates a strong ability to service its debt from its operating profits. However, it is essential for investors and stakeholders to continue monitoring this ratio to ensure that the company maintains its ability to cover its interest expenses effectively.