ResMed Inc (RMD)

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	1,598,437	1,546,752	1,470,187	1,370,185	1,289,140	1,215,227	1,164,511	1,144,441	1,113,601	1,047,195	1,007,300	1,000,286	986,526	975,687	957,365	912,348	892,002	886,076	844,659	798,865
Interest expense (ttm)	US$ in thousands	20,633	34,217	43,234	52,689	58,082	58,669	55,202	47,379	37,978	28,476	24,086	22,312	22,115	22,531	22,507	23,989	27,841	31,931	36,227	40,377
Interest coverage		77.47	45.20	34.01	26.01	22.20	20.71	21.10	24.16	29.32	36.77	41.82	44.83	44.61	43.30	42.54	38.03	32.04	27.75	23.32	19.79

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,598,437K ÷ $20,633K
= 77.47

The interest coverage ratio for ResMed Inc. exhibits significant fluctuations over the analyzed period, reflecting dynamic changes in the company's ability to meet its interest obligations through earnings before interest and taxes (EBIT). At the beginning of the period, as of June 30, 2020, the ratio stood at 19.79, indicating a strong capacity to cover interest expenses. This upward trend continued, peaking at 44.83 by June 30, 2022, which underscores an increasingly comfortable margin of safety in covering interest obligations.

Following this peak, the ratio experienced a gradual decline, reaching 20.71 by December 31, 2023, and further decreasing to 22.20 as of March 31, 2024. Despite this decline, the interest coverage remains above 20, suggesting that the company maintains a robust ability to service its interest payments. Projections indicate a substantial expected increase to 45.20 by December 2024, and an even more pronounced surge to 77.47 by March 31, 2025. Such projected figures imply either a significant improvement in earnings or a reduction in interest expenses, or potentially both.

Overall, the historical data reflects a strong financial position with regard to interest coverage, characterized by periods of expansion and contraction. The current and projected ratios suggest resilience in meeting interest obligations and an optimistic outlook for continued financial stability in this regard.