Greenbrier Companies Inc (GBX)
Interest coverage
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 324,500 | 176,400 | 118,000 | 41,000 | 168,400 |
| Interest expense | US$ in thousands | 93,900 | 79,200 | 55,700 | 43,263 | 43,619 |
| Interest coverage | 3.46 | 2.23 | 2.12 | 0.95 | 3.86 |
August 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $324,500K ÷ $93,900K
= 3.46
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a company has more earnings available to cover its interest payments.
Looking at Greenbrier Companies Inc's interest coverage ratio over the past five years, we can see a fluctuating trend. In 2024, the ratio stands at 3.46, which indicates that Greenbrier's earnings are sufficient to cover its interest expenses approximately 3.46 times over. This represents an improvement compared to the previous year's ratio of 2.23.
In 2023 and 2022, the interest coverage ratios were 2.23 and 2.12, respectively, showing a relatively consistent but moderate level of coverage. However, in 2021, the ratio dropped significantly to 0.95, indicating a potential strain on the company's ability to pay interest expenses with its current earnings.
The best performance in the past five years was seen in 2020, where the interest coverage ratio was much higher at 3.86, reflecting a strong ability to meet interest obligations.
Overall, while the recent improvement in 2024 is positive, it is essential for Greenbrier Companies Inc to maintain a healthy interest coverage ratio to ensure it can comfortably meet its interest payments and demonstrate financial stability to investors and creditors.
Peer comparison
Aug 31, 2024