Ralph Lauren Corp Class A (RL)

Interest coverage

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	921,400	868,800	849,700	821,900	806,100	586,500	557,100	596,800	591,700	725,800	726,700	771,900	812,200	756,000	657,100	387,100	-3,400	-262,700	-208,800	57,300
Interest expense (ttm)	US$ in thousands	47,300	45,500	44,500	43,100	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
Interest coverage		19.48	19.09	19.09	19.07	19.10	15.56	14.25	15.46	14.65	15.44	15.01	14.70	15.04	13.95	12.40	7.42	-0.07	-6.67	-6.65	2.49

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $921,400K ÷ $47,300K
= 19.48

Interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the company's interest expenses.

Analyzing the interest coverage data provided for Ralph Lauren Corp Class A, we observe fluctuations in the ratio over the specified time period. In June 2020, the interest coverage ratio was 2.49, indicating that the company's EBIT was sufficient to cover its interest expenses comfortably.

However, the following quarters showed a concerning trend with negative values, indicating that the company's EBIT was not enough to cover its interest obligations. This could suggest financial distress or challenges in generating profits to cover interest payments during that period.

Starting from June 2021, the interest coverage ratio improved significantly, surpassing 12 in the subsequent quarters. This significant improvement indicates that the company's earnings were more than enough to cover its interest expenses, reflecting a healthier financial position and improved profitability.

By the end of March 2025, the interest coverage ratio stood at 19.48, signifying a strong ability to meet interest payments. This improvement over time suggests that Ralph Lauren Corp Class A has successfully managed its interest obligations and enhanced its financial stability.

Overall, the analysis of the interest coverage ratio for Ralph Lauren Corp Class A indicates fluctuations in the company's ability to cover interest expenses but demonstrates a positive trend towards improved financial health and profitability in recent quarters.