HNI Corp (HNI)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 90,300 | 82,600 | 107,700 | 141,200 | 155,200 | 144,100 | 88,400 | 83,200 | 85,400 | 105,024 | 117,586 | 107,728 | 61,400 | 93,637 | 115,531 | 124,218 | 151,981 | 131,740 | 124,790 | 128,411 |
| Interest expense (ttm) | US$ in thousands | 25,500 | 19,900 | 12,900 | 9,500 | 8,786 | 8,175 | 7,628 | 7,385 | 7,154 | 7,184 | 6,848 | 6,934 | 6,990 | 7,104 | 7,792 | 8,611 | 9,267 | 9,225 | 9,622 | 9,578 |
| Interest coverage | 3.54 | 4.15 | 8.35 | 14.86 | 17.66 | 17.63 | 11.59 | 11.27 | 11.94 | 14.62 | 17.17 | 15.54 | 8.78 | 13.18 | 14.83 | 14.43 | 16.40 | 14.28 | 12.97 | 13.41 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $90,300K ÷ $25,500K
= 3.54
The interest coverage ratio for HNI Corp has shown fluctuations over the past few quarters. The ratio ranged from a low of 3.54 in December 2023 to a high of 17.66 in December 2022. Overall, the trend indicates that the company has generally been able to comfortably cover its interest expenses with operating earnings.
A higher interest coverage ratio signifies that the company is better equipped to meet its interest obligations. The peak ratios in the range of 14 to 17.66 suggest that HNI Corp had a strong ability to pay interest on its outstanding debt during those periods.
However, the decrease in the interest coverage ratio in the more recent quarters, dropping to 3.54 in December 2023, raises some concerns about the company's ability to cover its interest expenses. It may indicate increased financial leverage or a decline in operating earnings relative to interest costs.
Overall, while the company has demonstrated solid interest coverage in most periods, investors and creditors should continue to monitor this ratio closely to ensure HNI Corp remains financially stable and capable of servicing its debt obligations.