Hillenbrand Inc (HI)
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 | 750,200 | 357,200 | 402,800 | 52,200 | 199,300 |
| Interest expense | US$ in thousands | 77,700 | 64,300 | 74,300 | 77,400 | 27,400 |
| Interest coverage | 9.66 | 5.56 | 5.42 | 0.67 | 7.27 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $750,200K ÷ $77,700K
= 9.66
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
Hillenbrand Inc's interest coverage has fluctuated over the past five years. In 2023, the interest coverage ratio was 3.79, down from 5.89 in 2022 and 5.06 in 2021. This indicates that the company's ability to cover its interest expenses with operating income decreased in 2023 compared to the previous two years.
In 2020, the interest coverage ratio was 2.74, reflecting a lower ability to cover interest expenses compared to 2021. However, in 2019, the ratio was notably higher at 7.69, suggesting a strong ability to cover interest expenses that year.
The fluctuation in Hillenbrand Inc's interest coverage ratio could be attributed to changes in operating income and interest expenses. It is important for stakeholders to monitor this ratio as it reflects the company's financial risk and ability to service its debt obligations.
Peer comparison
Sep 30, 2023