GMS Inc (GMS)
Interest coverage
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 449,627 | 513,346 | 422,916 | 191,737 |
| Interest expense | US$ in thousands | 89,080 | 75,461 | 65,843 | 58,097 | 53,786 |
| Interest coverage | 0.00 | 5.96 | 7.80 | 7.28 | 3.56 |
April 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $89,080K
= 0.00
The interest coverage ratio of GMS Inc. demonstrates significant fluctuations over the analyzed period from April 30, 2021, to April 30, 2025. As of April 30, 2021, the ratio stood at 3.56, indicating that the company's earnings before interest and taxes (EBIT) were approximately 3.56 times the interest expenses, reflecting a moderate capacity to meet interest obligations.
By April 30, 2022, the ratio increased substantially to 7.28, suggesting a marked improvement in the company's ability to cover interest expenses, likely driven by enhanced earnings or reduced interest costs. This elevated level indicates strong financial health concerning debt service capability.
The upward trend continued into April 30, 2023, with the interest coverage ratio reaching 7.80. This further reinforces the company's strong position at this point in time, as it indicates an even more comfortable margin of coverage, thereby reducing default risk related to interest payments.
However, the trend changed notably in the subsequent period ending April 30, 2024, when the ratio declined to 5.96. Although still above 1.0, indicating that earnings comfortably cover interest expenses, the decrease suggests a potential weakening in earnings relative to interest obligations or increased interest expenses.
By April 30, 2025, the interest coverage ratio drops to 0.00. This indicates that GMS Inc. did not record sufficient earnings to cover interest expenses during this period, implying either a complete absence of earnings before interest and taxes or exceptionally high interest costs, which effectively eliminate the company's capacity to meet interest obligations from operational earnings.
Overall, the trend from 2021 to 2023 shows a strengthening of GMS Inc.'s ability to cover interest payments, reaching peak coverage in 2023. The subsequent decline signals potential financial stress or operational challenges in 2024, culminating in an inability to cover interest obligations in 2025.
Peer comparison
Apr 30, 2025