Paychex Inc (PAYX)
Interest coverage
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,174,100 | 2,145,600 | 2,107,700 | 2,073,800 | 2,033,100 | 1,973,800 | 1,924,700 | 1,892,700 | 1,840,000 | 1,799,800 | 1,705,600 | 1,619,600 | 1,460,700 | 1,406,500 | 1,408,000 | 1,395,400 | 1,460,500 | 1,475,400 | 1,434,600 | 1,400,100 |
| Interest expense (ttm) | US$ in thousands | 37,300 | 37,200 | 36,300 | 37,000 | 36,700 | 36,400 | 36,400 | 36,500 | 36,600 | 36,500 | 36,300 | 36,000 | 35,800 | 35,900 | 36,400 | 37,500 | 38,800 | 38,900 | 36,300 | 27,000 |
| Interest coverage | 58.29 | 57.68 | 58.06 | 56.05 | 55.40 | 54.23 | 52.88 | 51.85 | 50.27 | 49.31 | 46.99 | 44.99 | 40.80 | 39.18 | 38.68 | 37.21 | 37.64 | 37.93 | 39.52 | 51.86 |
May 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,174,100K ÷ $37,300K
= 58.29
The interest coverage ratio for Paychex Inc has been relatively consistent over the periods provided, ranging from 37.21 to 58.29. This indicates that the company has consistently generated sufficient earnings to cover its interest expenses. The trend shows a generally positive performance, with slight fluctuations but overall maintaining a healthy level of interest coverage.
A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations from its operating earnings. Paychex Inc's interest coverage ratio above 1 indicates that the company is generating more than enough operating income to cover its interest expenses, signaling financial strength and stability.
Overall, based on the interest coverage data provided, Paychex Inc appears to have a solid ability to meet its interest payment obligations, reflecting a stable and well-managed financial position.