KB Home (KBH)

Interest coverage

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	6,298,140	6,215,930	6,445,010	6,697,700	6,652,440	6,669,090	6,467,000	6,081,800	5,802,630	5,539,470	4,257,394	3,788,907	3,248,587	3,179,307	3,244,517	3,409,694	3,524,124	3,265,215	3,087,317	2,050,803
Interest expense (ttm)	US$ in thousands	178,872	161,079	135,039	-3,499	9,380	704	5,044	9,631	16,750	23,641	26,028	30,812	37,047	36,182	36,622	30,592	19,769	15,208	7,604	4,071
Interest coverage		35.21	38.59	47.73	—	709.22	9,473.14	1,282.12	631.48	346.43	234.32	163.57	122.97	87.69	87.87	88.59	111.46	178.27	214.70	406.01	503.76

February 29, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $6,298,140K ÷ $178,872K
= 35.21

The interest coverage ratio for KB Home has shown fluctuations over the past few reporting periods. From February 2019 to February 2020, the interest coverage ratio ranged between 35.21 and 709.22, indicating a wide disparity in the ability of the company to cover its interest expenses from its operating income.

The interest coverage ratio dropped significantly in May 2020 to 111.46 compared to the previous periods, suggesting potentially lower levels of profitability relative to the interest expenses incurred during that period. However, this ratio improved in subsequent periods, reaching 503.76 by November 2020, demonstrating a strong ability to cover interest expenses with operating income.

The interest coverage ratio then fluctuated throughout the rest of the reported periods, with values ranging from 87.69 to 47.73, showing some variability in the financial leverage and profitability of the company.

Overall, the interest coverage ratio of KB Home indicates the company's ability to meet its interest obligations through its operating profits, with some periods reflecting stronger coverage than others. It is important for investors and stakeholders to monitor this ratio to assess the company's financial health and risk exposure related to debt servicing.