MillerKnoll Inc (MLKN)
Interest coverage
| May 31, 2025 | May 31, 2024 | Jun 3, 2023 | May 31, 2023 | May 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 175,900 | 120,600 | 122,300 | 29,200 |
| Interest expense | US$ in thousands | — | 76,200 | 74,000 | 70,900 | 37,800 |
| Interest coverage | — | 2.31 | 1.63 | 1.72 | 0.77 |
May 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $—K
= —
The interest coverage ratio of MillerKnoll Inc. has exhibited a clear upward trend over the period from May 31, 2022, through May 31, 2024. Specifically, on May 31, 2022, the company’s interest coverage was notably low at 0.77, indicating that earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, which raises concerns about short-term debt servicing capability and suggests heightened financial risk at that time.
By May 31, 2023, the interest coverage had nearly doubled to 1.72, demonstrating significant improvement in the company’s ability to generate sufficient earnings to cover interest obligations. This ratio, although still below 2.0, indicates progress toward a more sustainable debt profile and reduced financial leverage risk.
On June 3, 2023, the ratio slightly declined to 1.63 but remained substantially higher than the previous year's figure, reinforcing a positive trend in earnings capacity related to interest coverage. This suggests that the company's operational performance or earnings improved, but some volatility persisted.
By May 31, 2024, the interest coverage ratio increased further to 2.31, surpassing the generally accepted threshold of 2.0, which is often considered a benchmark of healthy debt serviceability. This higher ratio reflects a strengthened financial position, likely stemming from increased profitability or improved operational efficiency, thereby enhancing the company's ability to comfortably meet interest obligations from its earnings.
Finally, the data for May 31, 2025, is not available, indicating that either the ratio was not calculated or reported at that time, leaving the future trajectory uncertain.
Overall, the trend from 2022 to 2024 indicates a significant and positive development in MillerKnoll Inc.'s interest coverage, moving from a precarious position to a more stable and comfortable level for debt servicing. This improvement suggests that the company has been effective in enhancing its earnings capacity relative to interest expenses over this period, thereby reducing financial risk and potentially increasing financial flexibility.