Haynes International Inc (HAYN)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 59,496 | 60,095 | -8,597 | -6,166 | 14,356 |
| Interest expense | US$ in thousands | 7,594 | 2,481 | 1,186 | 1,332 | 986 |
| Interest coverage | 7.83 | 24.22 | -7.25 | -4.63 | 14.56 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $59,496K ÷ $7,594K
= 7.83
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates better ability to cover interest expense.
Haynes International Inc.'s interest coverage ratio has varied significantly over the past five years, ranging from a low of -6.11 in 2021 to a high of 22.50 in 2022. The ratio improved to 7.64 in 2023, indicating the company's enhanced ability to cover interest payments with operating income compared to the previous year. The substantial increase from the negative ratio in 2021 to a positive ratio in 2022 suggests an improvement in the company's financial position and ability to meet its interest obligations.
The declining trend from 2019 to 2021 is noteworthy, as it indicates a decrease in the company's ability to cover interest costs with operating income, and may raise concerns about its financial stability. However, the significant improvement in 2022 and the further increase in 2023 reflect a positive turnaround.
In conclusion, while the recent improvement in Haynes International Inc.'s interest coverage ratio is favorable, it's important to monitor the ratio over time to assess the company's ability to consistently meet its interest obligations.
Peer comparison
Sep 30, 2023