REX American Resources Corporation (REX)

Interest coverage

		Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	64,329	68,839	25,775	69,084	4,212
Interest expense	US$ in thousands	—	—	11,464	130	299
Interest coverage		—	—	2.25	531.42	14.09

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $64,329K ÷ $—K
= —

The interest coverage ratio is a key financial metric that helps assess a company's ability to meet its interest obligations with its operating income. Looking at the data for REX American Resources Corporation over the years, the interest coverage ratio has varied significantly.

In January 31, 2021, the interest coverage ratio was 14.09, indicating that the company was generating enough operating income to cover its interest expenses approximately 14 times. This suggests a relatively healthy financial position with a good ability to meet interest payments.

By January 31, 2022, the interest coverage ratio improved dramatically to 531.42, reflecting a substantial increase in operating income relative to interest expenses. This significant improvement indicates a very strong ability to cover interest payments, which can be viewed positively by investors and creditors.

However, in January 31, 2023, the interest coverage ratio dropped to 2.25, signaling a decline in the company's ability to cover interest expenses with its operating income. A ratio below 3 may raise concerns about the company's financial health and ability to service its debt obligations comfortably.

The missing values for January 31, 2024, and January 31, 2025, make it challenging to assess the trend further. It would be important to monitor the company's financial performance in these periods to understand any potential changes in the interest coverage ratio and its implications for the company's financial stability.

Overall, the fluctuation in the interest coverage ratio for REX American Resources Corporation highlights the importance of closely monitoring financial metrics to assess the company's ability to manage its debt and interest obligations effectively.