MillerKnoll Inc (MLKN)
Interest coverage
| Aug 31, 2024 | Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Sep 3, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 164,000 | 162,000 | 137,000 | 112,800 | 120,600 | 162,700 | 170,900 | 137,100 | 21,800 | -23,100 | 6,800 | 73,100 | 236,700 | 26,600 | 19,900 | 43,400 | 9,800 | 271,000 | 269,100 | 228,100 |
| Interest expense (ttm) | US$ in thousands | 77,300 | 77,300 | 78,000 | 76,500 | 74,000 | 67,000 | 58,100 | 49,000 | 37,900 | 28,100 | 21,500 | 15,800 | 13,900 | 14,400 | 13,700 | 13,200 | 12,500 | 11,900 | 12,000 | 12,100 |
| Interest coverage | 2.12 | 2.10 | 1.76 | 1.47 | 1.63 | 2.43 | 2.94 | 2.80 | 0.58 | -0.82 | 0.32 | 4.63 | 17.03 | 1.85 | 1.45 | 3.29 | 0.78 | 22.77 | 22.42 | 18.85 |
August 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $164,000K ÷ $77,300K
= 2.12
MillerKnoll Inc's interest coverage ratio has shown significant fluctuations over the past few quarters. The interest coverage ratio measures the company's ability to pay interest expenses on its debt with its operating income. A ratio above 1 indicates that the company is generating enough operating income to cover its interest payments.
Looking at the trend, we can see that the interest coverage ratio has been volatile. In some quarters, such as Aug 28, 2021, and May 30, 2020, the company had very high interest coverage ratios of 17.03 and 22.77, respectively, indicating a strong ability to cover interest expenses.
However, there are also instances where the interest coverage ratio was below 1, such as on May 28, 2022, and Feb 26, 2022, when it was 0.58 and -0.82, respectively. This suggests that the company's operating income may not have been sufficient to cover its interest expenses during those periods.
Overall, it is important for MillerKnoll Inc to maintain a healthy interest coverage ratio consistently to ensure it can meet its debt obligations and avoid financial distress. Management should monitor this ratio closely and work towards improving financial stability and operational efficiency.