Greif Bros Corporation (GEF)
Interest coverage
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 518,000 | 605,500 | 646,500 | 696,600 | 705,600 | 621,200 | 609,300 | 576,700 | 587,200 | 585,200 | 535,500 | 424,300 | 295,700 | 304,900 | 328,800 | 392,500 | 411,100 | 399,100 | 386,700 | 375,100 |
| Interest expense (ttm) | US$ in thousands | 28,100 | 2,400 | 1,500 | 1,100 | 500 | 100 | 17,000 | 40,800 | 67,500 | 92,700 | 101,800 | 107,700 | 110,300 | 115,800 | 122,200 | 126,900 | 131,500 | 112,500 | 92,700 | 70,300 |
| Interest coverage | 18.43 | 252.29 | 431.00 | 633.27 | 1,411.20 | 6,212.00 | 35.84 | 14.13 | 8.70 | 6.31 | 5.26 | 3.94 | 2.68 | 2.63 | 2.69 | 3.09 | 3.13 | 3.55 | 4.17 | 5.34 |
January 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $518,000K ÷ $28,100K
= 18.43
Greif Inc's interest coverage ratio has shown a decreasing trend from Q1 2023 to Q4 2024. The company's ability to cover its interest expense has declined over this period, indicating potentially higher financial risk. Despite the fluctuations, Greif Inc maintained a relatively healthy interest coverage ratio above 5 in all quarters, suggesting that it is capable of meeting its interest obligations. However, the decreasing trend warrants further monitoring to assess the company's overall financial health and its ability to generate sufficient operating income to cover interest expenses. In general, a higher interest coverage ratio is preferred as it signifies a stronger financial position and lower risk of default.