Parker-Hannifin Corporation (PH)

Interest coverage

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	4,068,820	3,252,960	1,868,900	2,496,230	1,814,650
Interest expense	US$ in thousands	506,495	573,894	255,252	250,036	308,161
Interest coverage		8.03	5.67	7.32	9.98	5.89

June 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,068,820K ÷ $506,495K
= 8.03

Interest coverage measures a company's ability to meet its interest payments on outstanding debt. Parker-Hannifin Corporation's interest coverage has exhibited fluctuations over the past five years.

In June 2024, the interest coverage ratio stood at 8.03, indicating that the company generated 8.03 times earnings before interest and taxes (EBIT) compared to its interest expenses for the period. This suggests a strong ability to cover interest obligations from operating profits.

Comparing this to the previous year, the interest coverage ratio was 5.67 in June 2023, signifying a slight decrease in the company's ability to cover interest payments. However, it rebounded to 7.32 in June 2022, reflecting an improvement in covering interest costs.

Furthermore, in June 2021, the interest coverage ratio was the highest in the analyzed period at 9.98, indicating a robust ability to meet interest obligations. In contrast, in June 2020, the ratio dropped to 5.89, showing a decrease in the company's ability to cover interest expenses compared to the prior year.

Overall, Parker-Hannifin Corporation's interest coverage has shown variability over the past five years, with fluctuations in its ability to cover interest payments. However, the company has generally maintained a reasonable level of interest coverage, although attention should be paid to potential trends indicating changes in its ability to meet interest obligations.