Patterson Companies Inc (PDCO)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Apr 27, 2024 | Jan 31, 2024 | Jan 27, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 231,507 | 278,190 | 304,173 | 347,206 | 311,028 | 274,859 | 251,317 | 227,769 | 273,628 | 319,506 | 348,742 | 377,615 | 346,055 | 314,797 | 272,062 | 229,916 | 238,665 | 239,713 | 283,972 | 316,341 |
| Interest expense (ttm) | US$ in thousands | 48,805 | 51,083 | 50,669 | 49,171 | 46,782 | 44,393 | 42,521 | 40,308 | 40,464 | 40,620 | 40,839 | 41,058 | 37,804 | 34,550 | 30,382 | 26,214 | 23,363 | 20,698 | 20,014 | 19,972 |
| Interest coverage | 4.74 | 5.45 | 6.00 | 7.06 | 6.65 | 6.19 | 5.91 | 5.65 | 6.76 | 7.87 | 8.54 | 9.20 | 9.15 | 9.11 | 8.95 | 8.77 | 10.22 | 11.58 | 14.19 | 15.84 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $231,507K ÷ $48,805K
= 4.74
The interest coverage ratio of Patterson Companies Inc has been declining over the past few quarters, indicating a potential increase in the company's financial risk. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt using its operating income.
As of January 31, 2025, the interest coverage ratio stands at 4.74, which means that the company generates operating income nearly 4.74 times the amount of interest expense incurred. A ratio below 1 would signal that the company is not generating sufficient earnings to cover its interest costs.
The decreasing trend in the interest coverage ratio from 15.84 in April 30, 2022, to 4.74 in January 31, 2025, may suggest a deteriorating financial condition or a significant increase in debt levels without a corresponding increase in operating income.
Investors and creditors closely monitor the interest coverage ratio as a lower ratio could indicate difficulties in servicing debt obligations, potentially leading to credit rating downgrades or increased borrowing costs for the company. Patterson Companies Inc may need to carefully evaluate its debt levels and interest costs to ensure long-term financial stability and sustainability.
Peer comparison
Jan 31, 2025