Premier Inc (PINC)
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 | 127,972 | 242,093 | 260,073 | 256,917 | 373,620 |
| Interest expense | US$ in thousands | — | 14,470 | 11,142 | 11,964 | 11,313 |
| Interest coverage | — | 16.73 | 23.34 | 21.47 | 33.03 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $127,972K ÷ $—K
= —
The interest coverage ratio for Premier Inc has demonstrated a declining trend over the past few years. In Jun 30, 2020, the interest coverage ratio was highest at 33.03, indicating that the company's operating income was more than sufficient to cover its interest expenses. However, in the subsequent years, the ratio steadily decreased to 21.47 in Jun 30, 2021, further declining to 23.34 in Jun 30, 2022, and notably dropping to 16.73 in Jun 30, 2023.
This decline in the interest coverage ratio suggests that Premier Inc's ability to cover its interest expenses with its operating income has weakened over time. A decreasing interest coverage ratio may raise concerns about the company's financial health and its ability to meet its debt obligations. It is advisable for Premier Inc to closely monitor its interest coverage ratio and take appropriate measures to improve its financial stability and ensure its debt obligations are met comfortably.
Peer comparison
Jun 30, 2024