Mesa Laboratories Inc (MLAB)

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	-269,951	4,381	7,459	10,327	7,923
Interest expense	US$ in thousands	5,697	4,770	3,885	8,024	5,504
Interest coverage		-47.38	0.92	1.92	1.29	1.44

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-269,951K ÷ $5,697K
= -47.38

The interest coverage ratio for Mesa Laboratories Inc has exhibited fluctuating trends over the past five years. In March 2020, the company had an interest coverage ratio of 1.44, indicating that it earned 1.44 times the amount needed to cover its interest expenses. However, this ratio dropped significantly to 1.29 in March 2021, suggesting a potential strain on the company's ability to cover its interest payments.

In March 2022, the interest coverage ratio improved to 1.92, indicating a better ability to meet interest obligations compared to the previous year. However, in the following year, the interest coverage ratio deteriorated significantly to 0.92, raising concerns about the company's ability to cover its interest payments with its operating income.

The most recent data point in March 2024 reveals a concerning interest coverage ratio of -47.38, signaling that the company's operating income was insufficient to cover its interest expenses, which may raise red flags for lenders and investors about the company's financial health and ability to service its debt obligations. Overall, the fluctuating nature of Mesa Laboratories Inc's interest coverage ratio raises questions about its financial stability and ability to meet its debt obligations.