Patterson Companies Inc (PDCO)
Interest coverage
| Apr 27, 2024 | Apr 29, 2023 | Apr 30, 2022 | Apr 24, 2021 | Apr 25, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 288,375 | 304,756 | 288,038 | 225,087 | -547,699 |
| Interest expense | US$ in thousands | 44,910 | 33,636 | 20,288 | 24,284 | 41,787 |
| Interest coverage | 6.42 | 9.06 | 14.20 | 9.27 | -13.11 |
April 27, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $288,375K ÷ $44,910K
= 6.42
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. Patterson Companies Inc's interest coverage has fluctuated over the past five years, with values ranging from -13.11 to 14.20.
In 2024, the interest coverage ratio was 6.42, indicating that the company generated 6.42 times more operating income than the interest expense incurred during that period. This suggests that Patterson Companies Inc had a moderate ability to cover its interest obligations in 2024.
The highest interest coverage ratio of 14.20 was observed in 2022, reflecting a strong ability to cover interest expenses, which suggests a healthier financial position for the company during that year.
Conversely, in 2020, the company reported a negative interest coverage ratio of -13.11, implying that the operating income was insufficient to cover the interest expenses. A negative interest coverage ratio is a red flag as it indicates financial distress, making it challenging for the company to meet its debt obligations.
Overall, Patterson Companies Inc's interest coverage ratio has shown variability over the years, with fluctuations indicating changes in the company's ability to meet its interest obligations through operating income. An upward trend in the interest coverage ratio is generally a positive signal, demonstrating improved financial health and reduced financial risk.
Peer comparison
Apr 27, 2024