Matthews International Corporation (MATW)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -12,323 | 85,713 | -76,440 | 37,969 | -70,955 |
| Interest expense | US$ in thousands | — | 44,648 | 27,725 | 28,684 | 34,885 |
| Interest coverage | — | 1.92 | -2.76 | 1.32 | -2.03 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-12,323K ÷ $—K
= —
Interest coverage ratio measures a company's ability to make interest payments on its debt obligations. A higher interest coverage ratio indicates a greater ability to meet interest payments, while a ratio below 1 signifies that the company is not generating enough income to cover its interest expenses.
Based on the data provided for Matthews International Corporation, the interest coverage ratio has fluctuated over the past five years. In 2023 and 2021, the company had an interest coverage ratio of 1.92 and 1.32, respectively, indicating that it generated enough operating income to cover its interest expenses. However, in 2022 and 2020, the interest coverage ratio was negative at -2.76 and -2.03, respectively, suggesting that the company struggled to meet its interest payments from operating income alone.
It is important for investors and creditors to closely monitor Matthews International Corporation's interest coverage ratio, as consistent low or negative ratios could be a sign of financial distress and potential difficulties in servicing debt obligations. Further analysis of the company's financial health and debt management strategies would be necessary to determine the underlying reasons for the fluctuations in the interest coverage ratio.