Greif Bros Corporation (GEF)
Interest coverage
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 605,500 | 621,200 | 585,200 | 304,900 | 399,100 |
| Interest expense | US$ in thousands | 2,400 | 100 | 92,700 | 115,800 | 112,500 |
| Interest coverage | 252.29 | 6,212.00 | 6.31 | 2.63 | 3.55 |
October 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $605,500K ÷ $2,400K
= 252.29
The interest coverage ratio for Greif Inc has fluctuated over the past five years, indicating variations in the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). In 2023, the interest coverage was 6.22, reflecting a decrease from the previous year's 11.60. This suggests a potential reduction in the company's ability to meet its interest obligations from its operating income. However, the 2023 ratio is still higher than that of 2020 and 2019, indicating an improvement in comparison to those years. It's essential to monitor this ratio closely to assess the company's ability to service its debt and manage its financial obligations effectively.