HNI Corp (HNI)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 90,300 | 155,200 | 85,453 | 61,390 | 151,344 |
| Interest expense | US$ in thousands | 25,500 | 8,800 | 7,153 | 6,990 | 8,628 |
| Interest coverage | 3.54 | 17.64 | 11.95 | 8.78 | 17.54 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $90,300K ÷ $25,500K
= 3.54
The interest coverage ratio for HNI Corp has shown fluctuating trends over the past five years. In 2023, the interest coverage ratio decreased to 3.54 from 17.64 in 2022. This indicates that the company's ability to meet its interest payments with its operating income weakened significantly in 2023. However, it is important to note that a higher interest coverage ratio is generally considered healthier as it signifies that the company has more than enough earnings to cover its interest expenses. The steep decline in 2023 raises concerns about the company's financial health and ability to service its debt obligations effectively. Further analysis of the company's financial performance and debt structure is recommended to understand the reasons behind this significant decrease in the interest coverage ratio.