Helen of Troy Ltd (HELE)
Interest coverage
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 143,586 | 262,107 | 211,895 | 268,050 | 277,670 |
| Interest expense | US$ in thousands | 51,922 | 53,065 | 40,751 | 12,844 | 12,617 |
| Interest coverage | 2.77 | 4.94 | 5.20 | 20.87 | 22.01 |
February 28, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $143,586K ÷ $51,922K
= 2.77
Based on the data provided for Helen of Troy Ltd, the interest coverage ratio has been consistently declining over the years. As of February 28, 2021, the interest coverage ratio stood at 22.01, indicating that the company was able to cover its interest expenses 22 times over. However, this ratio decreased to 20.87 by February 28, 2022.
A significant decline in the interest coverage ratio occurred by February 28, 2023, where the ratio dropped substantially to 5.20, implying that the company's ability to cover its interest expenses declined significantly compared to the previous years. This declining trend continued as of February 29, 2024, with an interest coverage ratio of 4.94, further indicating a strain on the company's ability to cover interest costs.
By February 28, 2025, the interest coverage ratio had decreased even further to 2.77, signaling a continued deterioration in the company's ability to cover its interest obligations from its operating income. This declining trend in the interest coverage ratio over the years suggests potential financial risk for Helen of Troy Ltd, as lower ratios indicate a higher burden of interest expenses relative to its operating income. Further assessment and monitoring of the company's financial health and debt management strategies may be necessary to address this concerning trend.