Paychex Inc (PAYX)
Interest coverage
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 2,255,300 | 2,033,100 | 1,840,000 | 1,460,700 |
| Interest expense | US$ in thousands | 105,400 | 37,300 | 36,700 | 36,600 | 35,800 |
| Interest coverage | 0.00 | 60.46 | 55.40 | 50.27 | 40.80 |
May 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $105,400K
= 0.00
The interest coverage ratio for Paychex Inc. demonstrates a consistent and positive trend over the period from May 31, 2021 to May 31, 2024. Specifically, the ratio increased from 40.80 in 2021 to 50.27 in 2022, indicating a strengthening ability to cover interest expenses with its earnings. This upward trajectory continued through 2023, reaching 55.40, further affirming the company's improved capacity to meet its interest obligations. By May 31, 2024, the ratio increased again to 60.46, reflecting continued financial robustness and an enhanced margin of safety for interest payments.
However, the projected data for May 31, 2025 indicates a significant change, with the ratio dropping to 0.00. This abrupt decline suggests either the cessation of interest obligations, the expectation of substantial changes in earnings or debt structure, or a possible data anomaly. Given the preceding data, prior trends point towards a strong and increasing interest coverage, but the marked reduction in the 2025 projection warrants further investigation to understand the underlying circumstances impacting the company's ability to cover interest expenses in that year.