MGP Ingredients Inc (MGPI)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 85,713 | 162,892 | 171,989 | 167,216 | 175,694 | 158,134 | 147,958 | 138,152 | 146,604 | 122,302 | 122,254 | 124,940 | 95,306 | 101,704 | 82,893 | 57,301 | 50,509 | 54,949 | 52,901 | 52,437 |
| Interest expense (ttm) | US$ in thousands | 8,439 | 8,415 | 8,594 | 7,671 | 6,647 | 5,590 | 4,587 | 4,848 | 5,451 | 5,820 | 5,586 | 5,147 | 4,007 | 2,969 | 2,262 | 1,456 | 1,640 | 1,717 | 1,672 | 1,695 |
| Interest coverage | 10.16 | 19.36 | 20.01 | 21.80 | 26.43 | 28.29 | 32.26 | 28.50 | 26.89 | 21.01 | 21.89 | 24.27 | 23.78 | 34.26 | 36.65 | 39.36 | 30.80 | 32.00 | 31.64 | 30.94 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $85,713K ÷ $8,439K
= 10.16
The interest coverage ratio for MGP Ingredients Inc has shown a generally positive trend from March 31, 2020, to March 31, 2023, indicating the company's ability to meet its interest obligations comfortably. The ratio fluctuated between approximately 30 and 40 during this period, demonstrating a healthy buffer between earnings and interest payments.
However, starting from June 30, 2023, there was a noticeable decline in the interest coverage ratio. The ratio dropped to around 20 by December 31, 2024, reaching its lowest point in the period analyzed. This downward trend suggests a potential strain on the company's ability to cover its interest expenses with operating income.
It is important for stakeholders to monitor this trend closely as a declining interest coverage ratio may signal financial distress or difficulties in generating sufficient earnings to meet interest obligations. Further analysis of the company's financial performance and risk factors may be warranted to understand the factors contributing to this decline and assess the overall financial health of MGP Ingredients Inc.