Quanex Building Products (NX)
Interest coverage
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 62,675 | 95,905 | 100,854 | 109,520 | 105,182 | 100,499 | 97,067 | 102,763 | 112,322 | 110,818 | 98,135 | 84,777 | 82,624 | 83,415 | 78,008 | 65,556 | 55,545 | 3,483 | 6,509 | -22,101 |
| Interest expense (ttm) | US$ in thousands | 20,593 | 4,461 | 5,651 | 6,945 | 8,136 | 7,281 | 5,937 | 4,295 | 2,559 | 2,391 | 2,264 | 2,302 | 2,530 | 2,923 | 3,491 | 4,414 | 5,245 | 6,339 | 7,744 | 8,783 |
| Interest coverage | 3.04 | 21.50 | 17.85 | 15.77 | 12.93 | 13.80 | 16.35 | 23.93 | 43.89 | 46.35 | 43.35 | 36.83 | 32.66 | 28.54 | 22.35 | 14.85 | 10.59 | 0.55 | 0.84 | -2.52 |
October 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $62,675K ÷ $20,593K
= 3.04
The interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
Quanex Building Products' interest coverage ratio has been fluctuating over the periods in question. The ratio was relatively stable and healthy from Oct 2022 to Jul 2024, ranging from 12.93 to 46.35. During this time, the company demonstrated robust earnings relative to its interest payments, with Jul 2024 showing the highest coverage at 46.35.
However, there were noticeable declines in the interest coverage ratio in the earlier periods, such as Jan 2021 and Oct 2020, where the ratios were significantly low and even negative. This suggests that the company may have faced challenges in meeting its interest obligations with its operating income during these periods.
Overall, the trend indicates that Quanex Building Products has shown improvement in its ability to cover interest expenses in recent periods compared to earlier years. It is essential for the company to maintain a healthy interest coverage ratio to ensure financial stability and meet its debt obligations effectively.
Peer comparison
Oct 31, 2024