Ralph Lauren Corp Class A (RL)

Interest coverage

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	819,600	752,800	704,800	738,900	732,300	719,000	717,200	759,300	808,600	744,200	628,000	360,000	-26,300	-287,300	-227,100	30,200	344,000	666,800	636,900	616,700
Interest expense (ttm)	US$ in thousands	42,200	37,700	39,100	38,600	40,400	47,000	48,400	52,500	54,000	54,200	53,000	52,200	48,500	39,400	31,400	23,000	17,600	17,900	18,900	20,500
Interest coverage		19.42	19.97	18.03	19.14	18.13	15.30	14.82	14.46	14.97	13.73	11.85	6.90	-0.54	-7.29	-7.23	1.31	19.55	37.25	33.70	30.08

March 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $819,600K ÷ $42,200K
= 19.42

Ralph Lauren Corp Class A's interest coverage ratio has varied over the historical periods provided. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its interest payments.

Looking at the data, we see that the interest coverage ratio has generally been healthy, with values consistently above 1, indicating that the company's operating income has been sufficient to cover its interest expenses. The ratio has shown a positive trend from negative values in early 2021 to reaching a peak in the mid-2020s. This improvement suggests that the company's financial health has strengthened, and it has been managing its interest obligations more effectively.

It is worth noting that the interest coverage ratio experienced a sharp decline in late 2021, indicating a potential strain on the company's ability to cover its interest payments during that period. However, the ratio quickly recovered and has since stabilized at a level significantly higher than the industry benchmark of 1. This indicates that Ralph Lauren Corp Class A has made efforts to strengthen its financial position and improve its ability to service its debt.

Overall, the consistent improvement and maintenance of a strong interest coverage ratio suggest that Ralph Lauren Corp Class A is in a good financial position and has been effectively managing its interest obligations in recent periods.