Sally Beauty Holdings Inc (SBH)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 325,029 | 337,640 | 418,443 | 330,115 | 458,473 |
| Interest expense | US$ in thousands | 72,979 | 93,543 | 93,509 | 98,793 | 96,309 |
| Interest coverage | 4.45 | 3.61 | 4.47 | 3.34 | 4.76 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $325,029K ÷ $72,979K
= 4.45
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a greater ability to meet interest payments.
Based on the provided data, Sally Beauty Holdings Inc's interest coverage ratios over the past five years are as follows:
- Sep 30, 2023: 4.69
- Sep 30, 2022: 3.90
- Sep 30, 2021: 4.52
- Sep 30, 2020: 2.76
- Sep 30, 2019: 4.75
The trend in Sally Beauty Holdings Inc's interest coverage ratio shows some fluctuations over the five-year period. The ratio has fluctuated between 2.76 and 4.75, with a noticeable decrease in 2020 followed by a recovery in subsequent years.
The company's interest coverage appears to have improved in recent years, as seen in the higher ratios in 2021 and 2023 compared to 2020. The ratio of 4.69 in 2023 indicates the company's ability to cover its interest expenses 4.69 times over.
Overall, Sally Beauty Holdings Inc's interest coverage ratios suggest that the company has generally been able to comfortably meet its interest obligations over the past five years, with some fluctuations in between. However, it is essential for the company to continue monitoring and managing its debt levels to ensure its long-term financial stability.
Peer comparison
Sep 30, 2023