M/I Homes Inc (MHO)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	706,094	587,222	637,451	518,296	324,769
Interest expense	US$ in thousands	27,514	35,845	2,250	2,156	9,684
Interest coverage		25.66	16.38	283.31	240.40	33.54

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $706,094K ÷ $27,514K
= 25.66

The interest coverage ratio of M/I Homes Inc has shown significant fluctuations over the years. As of December 31, 2020, the interest coverage ratio stood at a healthy 33.54, indicating the company's ability to comfortably cover its interest obligations. This ratio improved substantially to 240.40 and 283.31 as of December 31, 2021 and 2022, respectively, reflecting a strong capacity to meet interest payments with its earnings.

However, a slight decline in the interest coverage ratio to 16.38 as of December 31, 2023, may raise concerns about the company's ability to cover its interest expenses adequately. The ratio improved again to 25.66 as of December 31, 2024, but it remains lower compared to the previous years.

Overall, while the company has demonstrated strong interest coverage in recent years, investors and stakeholders should closely monitor future financial performance to ensure M/I Homes Inc can sustainably meet its interest payment obligations.