H&R Block Inc (HRB)
Interest coverage
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 859,516 | 841,402 | 784,190 | 747,351 | 775,606 |
| Interest expense | US$ in thousands | 78,113 | 79,080 | 72,978 | 88,282 | 106,870 |
| Interest coverage | 11.00 | 10.64 | 10.75 | 8.47 | 7.26 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $859,516K ÷ $78,113K
= 11.00
The interest coverage ratio of H&R Block Inc. demonstrates a consistent upward trend over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the ratio stood at 7.26, indicating that the company's earnings before interest and taxes (EBIT) were sufficient to cover its interest expenses approximately 7.26 times. This ratio increased significantly in the subsequent year to 8.47 by June 30, 2022, reflecting an improvement in the company's ability to meet its interest obligations.
The growth continued into 2023, with the interest coverage ratio reaching 10.75, signifying a substantial enhancement in the company's financial capacity to service interest expenses. This trend persisted into the projections for 2024 and 2025, with the ratios slightly declining yet remaining high at 10.64 and 11.00, respectively. These values suggest that H&R Block Inc. is positioned with a strong buffer above its interest commitments, indicating low risk of distress related to interest coverage.
Overall, the progression of increasing interest coverage ratios over these years underscores improvements in earnings relative to interest expenses, reflecting a strengthening of the company's financial health and operational efficiency. The consistently high ratios suggest that the company maintains a comfortable margin of safety in meeting its debt service obligations.
Peer comparison
Jun 30, 2025