Jacobs Solutions Inc. (J)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,030,070 | 905,188 | 824,525 | 609,371 | 968,800 |
| Interest expense | US$ in thousands | 168,108 | 100,246 | 72,714 | 62,206 | 83,867 |
| Interest coverage | 6.13 | 9.03 | 11.34 | 9.80 | 11.55 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,030,070K ÷ $168,108K
= 6.13
Interest coverage is a financial ratio that indicates a company's ability to meet interest obligations on its outstanding debt. Jacobs Solutions Inc. has exhibited a declining trend in interest coverage over the past five years. In 2023, the interest coverage ratio stood at 6.13, down from 9.03 in 2022, 11.34 in 2021, 9.80 in 2020, and 11.55 in 2019.
A higher interest coverage ratio typically signifies a company is in a better position to cover its interest expenses from its earnings. The decreasing trend in Jacobs Solutions Inc.'s interest coverage ratio could indicate a potential weakening ability to cover interest costs with operating profits. It may suggest either a decrease in earnings or an increase in interest expenses over the years.
It is essential for the company to closely monitor and manage its interest coverage ratio to ensure financial stability and avoid potential cash flow issues or default risks associated with servicing its debt obligations. Monitoring trends in interest coverage can provide valuable insights into the company's financial health and ability to meet its debt obligations in the long run.
Peer comparison
Sep 30, 2023