GMS Inc (GMS)
Interest coverage
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 449,627 | 513,346 | 422,916 | 190,880 | 114,043 |
| Interest expense | US$ in thousands | 75,461 | 65,843 | 58,097 | 53,786 | 67,718 |
| Interest coverage | 5.96 | 7.80 | 7.28 | 3.55 | 1.68 |
April 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $449,627K ÷ $75,461K
= 5.96
The interest coverage ratio for GMS Inc has shown a positive trend over the past five years, indicating the company's improving ability to meet its interest payment obligations. The ratio increased from 1.68 in April 2020 to 5.96 in April 2024, suggesting that the company's operating income is becoming more than sufficient to cover its interest expenses.
In particular, the substantial improvement from 2020 to 2024 highlights GMS Inc's enhanced financial health and reduced financial risk associated with servicing its debt. The company's interest coverage ratio exceeded 1 in all the years, signifying that GMS Inc generated enough operating income to pay off its interest expenses comfortably.
Furthermore, the consistently increasing trend from 2020 to 2024 suggests that GMS Inc's financial performance has been steadily improving, instilling confidence in its ability to honor its debt obligations and maintain financial stability in the future. This positive trajectory is a good indication of the company's efficient management of its interest payments and solid financial position.
Peer comparison
Apr 30, 2024