HP Inc (HPQ)
Interest coverage
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,818,000 | 3,456,000 | 4,559,000 | 5,359,000 | 3,462,000 |
| Interest expense | US$ in thousands | 452,000 | 548,000 | 359,000 | 254,000 | 239,000 |
| Interest coverage | 8.45 | 6.31 | 12.70 | 21.10 | 14.49 |
October 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,818,000K ÷ $452,000K
= 8.45
HP Inc's interest coverage ratio has fluctuated over the past five years, reflecting its ability to meet its interest obligations. The ratio stood at 8.45 in Oct 31, 2024, indicating an increase from the previous year. This suggests that HP Inc's earnings before interest and taxes (EBIT) were 8.45 times higher than its interest expenses for the year, demonstrating a strong ability to cover its interest payments.
In comparison to the prior years, the interest coverage ratio was 6.31 in Oct 31, 2023, lower than the current year. This may indicate that HP Inc had a slightly weaker ability to cover its interest costs relative to the current year. However, the ratio in Oct 31, 2022, was higher at 12.70, showing a stronger interest coverage compared to the previous two years.
Moreover, in Oct 31, 2021, the interest coverage ratio was notably high at 21.10, indicating a robust ability to cover interest expenses, likely due to higher EBIT compared to the following years. In Oct 31, 2020, the ratio was 14.49, showing a solid interest coverage ratio similar to the current year.
Overall, HP Inc's interest coverage has varied over the years but has generally been at levels that demonstrate the company's capability to meet its interest obligations comfortably. It suggests that HP Inc has been managing its interest expenses effectively, though there have been fluctuations in the ratio over the past five years.
Peer comparison
Oct 31, 2024