ScanSource Inc (SCSC)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 90,324 | 143,353 | 125,246 | 29,870 | -172,979 |
| Interest expense | US$ in thousands | 386 | 19,786 | 6,523 | 6,929 | 12,224 |
| Interest coverage | 234.00 | 7.25 | 19.20 | 4.31 | -14.15 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $90,324K ÷ $386K
= 234.00
The interest coverage ratio for ScanSource Inc has displayed significant fluctuations over the past five years. In 2024, the interest coverage ratio was very high at 234.00, indicating that the company generated ample operating income to cover its interest expenses. This represents a substantial improvement compared to the previous year where the ratio was 7.25, suggesting a heightened ability to meet interest obligations in 2024.
In 2023 and 2022, the company's interest coverage ratios were 7.25 and 19.20, respectively, reflecting varying levels of ability to cover interest payments. The sharp increase in the interest coverage ratio from 4.31 in 2021 to 19.20 in 2022 indicates an improvement in the company's earnings relative to its interest expenses.
However, in 2020, ScanSource Inc had a negative interest coverage ratio of -14.15, indicating that the company's operating income was insufficient to cover interest costs, posing a risk of financial distress. Overall, the fluctuating trend in the company's interest coverage ratio underscores the importance of closely monitoring its ability to service its debt obligations in relation to its earnings performance.
Peer comparison
Jun 30, 2024