RPM International Inc (RPM)
Interest coverage
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 904,761 | 767,357 | 693,742 | 752,981 | 508,070 |
| Interest expense | US$ in thousands | 117,969 | 119,015 | 87,928 | 85,400 | 101,003 |
| Interest coverage | 7.67 | 6.45 | 7.89 | 8.82 | 5.03 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $904,761K ÷ $117,969K
= 7.67
The interest coverage ratio for RPM International Inc has shown consistency and improvement over the past five years. The ratio has ranged from 5.03 in 2020 to 8.82 in 2021, demonstrating the company's ability to cover its interest expenses with its operating income. In the most recent year, ending May 31, 2024, the interest coverage ratio stood at 7.67, indicating that the company generated over 7 times the operating income needed to cover its interest expenses.
Overall, the trend in the interest coverage ratio suggests that RPM International Inc has maintained a healthy level of financial stability and profitability in meeting its interest obligations. Investors and creditors typically view a higher interest coverage ratio favorably as it indicates a lower risk of default on debt payments.
Peer comparison
May 31, 2024