HP Inc (HPQ)
Interest coverage
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,818,000 | 3,841,000 | 3,853,000 | 3,648,000 | 3,456,000 | 3,183,000 | 3,487,000 | 3,997,000 | 4,559,000 | 5,113,000 | 5,238,000 | 5,343,000 | 5,359,000 | 5,056,000 | 4,454,000 | 3,918,000 | 3,462,000 | 3,414,000 | 3,714,000 | 3,816,000 |
| Interest expense (ttm) | US$ in thousands | 458,000 | 468,000 | 491,000 | 522,000 | 549,000 | 560,000 | 522,000 | 443,000 | 361,000 | 292,000 | 264,000 | 254,000 | 256,000 | 258,000 | 245,000 | 245,000 | 240,000 | 237,000 | 239,000 | 236,000 |
| Interest coverage | 8.34 | 8.21 | 7.85 | 6.99 | 6.30 | 5.68 | 6.68 | 9.02 | 12.63 | 17.51 | 19.84 | 21.04 | 20.93 | 19.60 | 18.18 | 15.99 | 14.42 | 14.41 | 15.54 | 16.17 |
October 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,818,000K ÷ $458,000K
= 8.34
HP Inc's interest coverage ratio has shown fluctuations over the past years, ranging from a low of 5.68 in July 2023 to a high of 21.04 in January 2022. Generally, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income.
The trend indicates that HP Inc's interest coverage has been relatively strong in recent years, with the ratio consistently above 10. This suggests that the company has been generating sufficient operating income to comfortably cover its interest expenses.
However, it is important to note the slight decrease in the interest coverage ratio in the most recent months, from 8.34 in October 2024 to 6.99 in January 2024. This decline may warrant further monitoring to ensure that HP Inc's ability to cover interest payments remains stable, especially in challenging economic environments.
Overall, HP Inc's interest coverage ratio reflects a generally healthy financial position, but ongoing monitoring is advisable to assess any potential impact on the company's profitability and financial stability.
Peer comparison
Oct 31, 2024