Scholastic Corporation (SCHL)
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 | 18,100 | 113,800 | 92,600 | -33,000 | -112,900 |
| Interest expense | US$ in thousands | 1,900 | 1,400 | 2,900 | 6,200 | 3,000 |
| Interest coverage | 9.53 | 81.29 | 31.93 | -5.32 | -37.63 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $18,100K ÷ $1,900K
= 9.53
The interest coverage ratio for Scholastic Corporation has exhibited significant fluctuations over the past five years. In May 2024, the interest coverage ratio was 9.53, indicating that the company generated sufficient operating income to cover its interest expenses nearly ten times over. This suggests a strong ability to meet its interest obligations from its operating earnings.
The interest coverage ratio sharply improved in May 2023 to 81.14, indicating robust financial health and a high level of protection for creditors. This sharp increase suggests a significant increase in operating income relative to interest expenses during that period.
In May 2022, the interest coverage ratio was 31.90, which also indicates a healthy ability to cover interest payments with operating income. This suggests a strong financial position and a good ability to service the company's debt.
However, in May 2021 and May 2020, the interest coverage ratios were negative, at -1.95 and -28.93 respectively. These negative ratios indicate that the company's operating income was not sufficient to cover its interest expenses during those years. This could raise concerns about the company's financial stability and ability to meet its debt obligations during those periods.
Overall, the trend in Scholastic Corporation's interest coverage ratio shows fluctuations, with the company demonstrating strong interest coverage in recent years compared to negative coverage in the two preceding years. This analysis suggests that the company's ability to cover its interest expenses has improved in recent years, but investors and creditors should closely monitor future financial performance to ensure continued stability.
Peer comparison
May 31, 2024