Prestige Brand Holdings Inc (PBH)

Interest coverage

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	331,821	343,185	-24,751	312,815	273,136
Interest expense	US$ in thousands	47,632	67,160	69,164	64,287	82,328
Interest coverage		6.97	5.11	-0.36	4.87	3.32

March 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $331,821K ÷ $47,632K
= 6.97

Interest coverage is a crucial financial metric that indicates a company's ability to meet its interest obligations with operating income. Looking at the data provided for Prestige Brand Holdings Inc, the interest coverage ratio has shown some fluctuation over the years.

As of March 31, 2021, the interest coverage ratio stood at 3.32, signifying that the company's operating income was sufficient to cover its interest expenses approximately three times over. This indicates a moderate level of financial health.

By March 31, 2022, the interest coverage ratio improved to 4.87, suggesting a strengthening of Prestige Brand Holdings Inc's ability to meet its interest payments from operating profits.

However, there was a significant decline in the interest coverage ratio to -0.36 by March 31, 2023, indicating that the company's operating income was not sufficient to cover its interest expenses. A negative interest coverage ratio raises concerns about the company's financial stability and its ability to meet debt obligations.

The trend reversed positively in the following years, with the interest coverage ratio increasing to 5.11 by March 31, 2024, and further to 6.97 by March 31, 2025. These higher ratios suggest a significant improvement in Prestige Brand Holdings Inc's ability to cover its interest payments comfortably with its operating income.

Overall, it is essential for investors and stakeholders to closely monitor Prestige Brand Holdings Inc's interest coverage ratio to assess the company's financial strength and ability to service its debt obligations in the future.