M/I Homes Inc (MHO)

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	545,595	678,651	662,109	626,522	588,105	617,482	612,646	644,852	635,498	611,995	569,920	527,820	515,269	486,828	456,996	389,850	324,769	274,169	232,544	204,303
Interest expense (ttm)	US$ in thousands	27,514	29,887	29,041	26,363	20,832	12,078	6,945	2,968	2,250	2,667	2,040	1,799	2,304	2,932	4,097	6,160	9,684	13,203	16,601	19,283
Interest coverage		19.83	22.71	22.80	23.77	28.23	51.12	88.21	217.27	282.44	229.47	279.37	293.40	223.64	166.04	111.54	63.29	33.54	20.77	14.01	10.59

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $545,595K ÷ $27,514K
= 19.83

The interest coverage ratio of M/I Homes Inc has displayed fluctuating trends over the reporting periods. From March 31, 2020, to June 30, 2021, the interest coverage ratio showed a consistent increasing pattern, indicating the company's ability to meet its interest obligations with relative ease. The peak in June 30, 2021, at 111.54 demonstrates exceptionally strong coverage of interest expenses.

However, the interest coverage ratio started declining from September 30, 2021, and experienced a significant drop in the following quarters up to June 30, 2023, indicating potential challenges in servicing interest payments efficiently. This downward trend might raise concerns regarding the company's ability to cover interest expenses from its operating income effectively.

Moreover, the ratios in the latter part of 2023 and 2024 showed values below 30, suggesting a substantial decrease in the company's ability to fulfill its interest obligations comfortably. These lower interest coverage ratios could imply heightened financial risk and potentially indicate a strain on the company's ability to generate enough earnings to cover its interest expenses.

Overall, the fluctuating nature of M/I Homes Inc's interest coverage ratio highlights the need for a thorough assessment of the company's financial health and its ability to manage debt costs effectively in the coming periods.