MSC Industrial Direct Company Inc (MSM)
Interest coverage
| Aug 31, 2024 | Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 390,387 | 478,825 | 468,035 | 301,859 | 350,282 |
| Interest expense | US$ in thousands | 396 | 22,543 | 17,599 | 14,510 | 16,673 |
| Interest coverage | 985.83 | 21.24 | 26.59 | 20.80 | 21.01 |
August 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $390,387K ÷ $396K
= 985.83
The interest coverage ratio for MSC Industrial Direct Company Inc has demonstrated significant fluctuations over the past five years. In August 2024, the interest coverage ratio stood at an impressive 985.83, indicating the company's strong ability to cover its interest expenses with its operating income. This represents a substantial increase compared to the ratios of 21.24 in September 2023, 26.59 in September 2022, 20.80 in August 2021, and 21.01 in August 2020.
The substantial increase in the interest coverage ratio from September 2023 to August 2024 suggests a significant improvement in the company's financial health and ability to service its debt obligations. It is essential to note that an interest coverage ratio significantly above 1 indicates that the company generates more than enough operating income to cover its interest expenses, which is generally seen as a positive indicator of financial stability and solvency.
Overall, the substantial fluctuations in the interest coverage ratio over the past five years indicate the changing financial dynamics of MSC Industrial Direct Company Inc and highlight the importance of regularly monitoring and analyzing this key financial metric to assess the company's ability to meet its debt obligations.
Peer comparison
Aug 31, 2024