Quanex Building Products (NX)
Interest coverage
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 62,675 | 105,182 | 112,322 | 82,624 | 55,545 |
| Interest expense | US$ in thousands | 20,593 | 8,136 | 2,559 | 2,530 | 5,245 |
| Interest coverage | 3.04 | 12.93 | 43.89 | 32.66 | 10.59 |
October 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $62,675K ÷ $20,593K
= 3.04
Quanex Building Products' interest coverage ratio has exhibited fluctuating trends over the past five years. In 2024, the interest coverage ratio stands at 3.04, signaling a decrease from the previous year's level of 12.93. This downward trend suggests that the company's ability to cover its interest expenses with its operating income has weakened in the most recent fiscal year.
Comparing the current ratio to the figures from 2022 and 2023, where the values were 43.89 and 32.66, respectively, there is a substantial decline in the company's interest coverage efficiency. Despite this decrease, the interest coverage ratio remains above 1, indicating that Quanex Building Products is still generating enough operating income to cover its interest obligations.
Additionally, when looking at the 2020 interest coverage ratio of 10.59, there is a noticeable improvement in the company's ability to cover its interest expenses in the more recent years. However, the significant drop in 2024 raises questions about the company's ability to efficiently service its debt moving forward.
Overall, while Quanex Building Products' interest coverage ratio has experienced fluctuations, maintaining a ratio above 1 signifies that the company is generating sufficient earnings to meet its interest payments. It is important for stakeholders to closely monitor this ratio in the future to ensure the company's financial health and debt repayment capacity.
Peer comparison
Oct 31, 2024