Leslies Inc (LESL)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 102,179 | 238,357 | 197,539 |
| Interest expense | US$ in thousands | 65,438 | 30,240 | 34,410 |
| Interest coverage | 1.56 | 7.88 | 5.74 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $102,179K ÷ $65,438K
= 1.56
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. In the case of Leslies Inc, the interest coverage ratio has fluctuated over the past three years.
In Sep 30, 2023, Leslies Inc reported an interest coverage ratio of 1.56, indicating that the company's operating income was only sufficient to cover its interest expenses 1.56 times. This suggests a potential heightened risk of financial distress due to a lower level of earnings relative to interest expenses.
Compared to the previous year, there was a significant drop in the interest coverage ratio from 7.88 in Sep 30, 2022 to 1.56 in Sep 30, 2023. This substantial decline may raise concerns about Leslies Inc's ability to generate enough earnings to cover its interest payments effectively.
Moreover, in the preceding year, Sep 30, 2021, Leslies Inc had an interest coverage ratio of 5.74, which was higher than the most recent year but still lower than the previous year. This suggests a comparative improvement in covering interest obligations in 2021 compared to 2023.
Overall, the declining trend in Leslies Inc's interest coverage ratio over the past three years may indicate a deteriorating financial position in terms of servicing debt. It is essential for stakeholders to closely monitor the company's financial performance to assess its ability to meet its interest obligations and maintain financial stability in the future.
Peer comparison
Sep 30, 2023