Dorian LPG Ltd (LPG)
Interest coverage
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 328,830 | 198,360 | 92,399 | 116,100 | 161,069 |
| Interest expense | US$ in thousands | 38,008 | 32,766 | 20,412 | 21,665 | 32,355 |
| Interest coverage | 8.65 | 6.05 | 4.53 | 5.36 | 4.98 |
March 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $328,830K ÷ $38,008K
= 8.65
The interest coverage ratio for Dorian LPG Ltd has shown a generally positive trend over the past five years. The ratio has improved from 4.98 in March 2020 to 8.65 in March 2024, indicating the company's ability to cover its interest expenses with operating income has strengthened over this period. This positive trend suggests that the company has been becoming more efficient in generating earnings to meet its interest payment obligations. Investors and creditors may view this improvement positively as it signifies a healthier financial position and reduced risk of default due to insufficient earnings to cover interest expenses.