MillerKnoll Inc (MLKN)
Interest coverage
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Mar 2, 2024 | Feb 29, 2024 | Dec 2, 2023 | Nov 30, 2023 | Sep 2, 2023 | Aug 31, 2023 | Jun 3, 2023 | May 31, 2023 | Mar 4, 2023 | Feb 28, 2023 | Dec 3, 2022 | Nov 30, 2022 | Sep 3, 2022 | Aug 31, 2022 | May 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 50,500 | 69,700 | 196,400 | 183,200 | 227,800 | 229,000 | 225,000 | 213,200 | 163,600 | 145,100 | 124,100 | 135,100 | 160,500 | 167,400 | 196,200 | 200,800 | 238,000 | 235,800 | 223,300 | 195,600 |
| Interest expense (ttm) | US$ in thousands | 76,700 | 78,200 | 77,500 | 75,500 | 75,400 | 76,400 | 77,200 | 78,000 | 78,100 | 78,200 | 78,100 | 78,000 | 76,400 | 74,800 | 72,400 | 70,000 | 64,600 | 59,200 | 52,700 | 46,200 |
| Interest coverage | 0.66 | 0.89 | 2.53 | 2.43 | 3.02 | 3.00 | 2.91 | 2.73 | 2.09 | 1.86 | 1.59 | 1.73 | 2.10 | 2.24 | 2.71 | 2.87 | 3.68 | 3.98 | 4.24 | 4.23 |
May 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $50,500K ÷ $76,700K
= 0.66
The interest coverage ratios for MillerKnoll Inc. have exhibited notable fluctuations over the specified periods. Initially, the ratio was relatively strong, with figures exceeding 4.2 in May and August 2022 (4.23 and 4.24, respectively), indicating a comfortable capacity to service interest expenses during this period. However, a decline commenced thereafter, with the ratio decreasing progressively through late 2022 and into early 2023; it reached a low of approximately 2.24 in March 2023, suggesting a diminishing buffer to cover interest obligations.
Throughout 2023, there was some variability. The ratio partially recovered from its early 2023 lows, reaching approximately 2.91 in February 2024 and 3.00 in March 2024, reflecting an improvement in earnings capacity relative to interest expenses. The trend continued into mid-2024, with ratios around 3.02 in May and 2.43 in August, though the latter indicated a slight weakening. By late 2024 and early 2025, the ratios varied within a declining range; notably, the ratio dropped sharply to 0.89 in February 2025, and further to 0.66 in May 2025, signaling that earnings before interest and taxes (EBIT) nearly or completely fell short of covering interest expenses at these points.
The overall trend indicates a trajectory from a robust interest coverage position in mid-2022 toward a much more fragile standing by early 2025. A ratio below 1 suggests difficulties in meeting interest obligations solely from operating earnings, implying increased financial risk and potential liquidity concerns. The fluctuations reflect underlying changes in earnings power, possibly influenced by operational, economic, or industry-specific factors impacting MillerKnoll Inc.'s profitability and ability to generate sufficient earnings relative to its interest commitments.