Hillenbrand Inc (HI)

Interest coverage is a financial ratio that indicates a company's ability to pay its interest expenses using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to meet interest obligations.

In the case of Hillenbrand Inc, the interest coverage ratio has been fluctuating over the past five years. In 2024, the interest coverage ratio was negative at -0.20, implying that the company's EBIT was insufficient to cover its interest expenses. This could be a cause for concern as it indicates a potential risk of default on debt obligations.

In 2023, the interest coverage ratio improved significantly to 9.66, indicating that the company's EBIT was more than sufficient to cover its interest expenses. This suggests a strong financial position and the ability to comfortably meet interest payments.

In the two preceding years, 2022 and 2021, the interest coverage ratios were 5.56 and 5.42 respectively, which also indicate a healthy ability to cover interest expenses with earnings. However, in 2020, the interest coverage ratio was notably lower at 0.67, suggesting a potential strain on the company's ability to meet interest obligations.

Overall, Hillenbrand Inc's interest coverage ratio has displayed fluctuations over the five-year period, with some years showing a strong ability to cover interest expenses and others raising concerns about the company's financial health and ability to service its debt. Further analysis of the company's financial performance and debt management strategies may provide additional insights into its overall financial stability.

Peer comparison

Sep 30, 2024