HP Inc (HPQ)
Interest coverage
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,456,000 | 4,559,000 | 5,359,000 | 3,462,000 | 3,877,000 |
| Interest expense | US$ in thousands | 548,000 | 359,000 | 254,000 | 239,000 | 242,000 |
| Interest coverage | 6.31 | 12.70 | 21.10 | 14.49 | 16.02 |
October 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,456,000K ÷ $548,000K
= 6.31
HP Inc's interest coverage ratio has experienced a declining trend over the past five years, indicating a decrease in the company's ability to cover its interest expenses from its operating income. The interest coverage ratio has decreased from 22.11 in 2021 to 7.71 in 2023, reflecting a significant decline in the company's ability to meet its interest obligations. This downward trend may raise concerns about HP Inc's financial stability and its capacity to service its debt obligations from its operating earnings. It is important for stakeholders to closely monitor this trend and assess the company's ability to generate sufficient operating income to cover its interest expenses in the future.
Peer comparison
Oct 31, 2023