Eagle Materials Inc (EXP)

Interest coverage

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 Jun 30, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 623,148 633,669 636,510 632,429 625,526 642,890 622,736 617,468 596,676 562,332 541,794 499,294 484,486 459,669 448,379 425,972 440,088 434,640 181,185 163,272
Interest expense (ttm) US$ in thousands 42,244 41,628 42,622 41,554 42,927 43,050 41,704 40,150 35,256 30,910 27,629 31,247 30,899 33,379 37,101 37,389 44,433 45,865 46,035 43,623
Interest coverage 14.75 15.22 14.93 15.22 14.57 14.93 14.93 15.38 16.92 18.19 19.61 15.98 15.68 13.77 12.09 11.39 9.90 9.48 3.94 3.74

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $623,148K ÷ $42,244K
= 14.75

Interest coverage measures a company's ability to meet its interest payments on outstanding debt using its operating earnings. A higher interest coverage ratio indicates that the company is in a better position to cover its interest expenses.

Analyzing Eagle Materials Inc's interest coverage ratio over the provided time period shows a generally increasing trend. The interest coverage ratio was 3.74 as of June 30, 2020, indicating that the company's operating earnings were able to cover its interest expenses approximately 3.74 times.

Over the subsequent quarters, the interest coverage ratio steadily increased, reaching 15.98 as of June 30, 2022. This substantial improvement suggests that Eagle Materials Inc's ability to cover its interest payments significantly strengthened during this period.

However, there was a slight decrease in the interest coverage ratio in the following quarters, reaching 14.57 as of March 31, 2024. Despite this decline, the ratio remained relatively healthy, indicating that the company's operating earnings continued to provide a solid buffer against its interest obligations.

Overall, the trend in Eagle Materials Inc's interest coverage ratio demonstrates a consistent improvement in its ability to meet its interest payments over the reviewed quarters. This suggests that the company's financial position has been relatively strong, with operating earnings outpacing interest expenses, providing a favorable outlook for investors and creditors.