Pure Storage Inc (PSTG)
Interest coverage
| Feb 4, 2024 | Feb 5, 2023 | Feb 6, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 98,069 | 96,557 | -91,819 | -238,757 | -166,769 |
| Interest expense | US$ in thousands | 7,483 | 4,749 | 36,677 | 31,403 | 27,897 |
| Interest coverage | 13.11 | 20.33 | -2.50 | -7.60 | -5.98 |
February 4, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $98,069K ÷ $7,483K
= 13.11
The interest coverage ratio for Pure Storage Inc has fluctuated over the past five years. In February 2024, the interest coverage ratio stood at 13.11, indicating that the company generated 13.11 times the earnings to cover its interest expenses. This suggests a strong ability to meet its interest obligations using its operating income.
In February 2023, the interest coverage ratio improved significantly to 20.33, reflecting a more robust ability to cover interest expenses compared to the previous year. However, in February 2022, the interest coverage ratio turned negative at -2.50, indicating that the company's operating income was insufficient to cover its interest expenses. This negative figure raises concerns about the company's financial health and ability to service its debt obligations from its earnings during that period.
The negative trend continued into January 2021 and February 2020, with interest coverage ratios of -7.60 and -5.98, respectively. These figures suggest ongoing challenges for Pure Storage Inc in meeting its interest payments from its operating income during those years.
Overall, the fluctuation in Pure Storage Inc's interest coverage ratio highlights the importance of closely monitoring the company's ability to generate sufficient earnings to cover its interest expenses and the potential impact on its financial stability and debt servicing capabilities.
Peer comparison
Feb 4, 2024