ScanSource Inc (SCSC)
Interest coverage
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 112,872 | 141,636 | 125,146 | 64,464 |
| Interest expense | US$ in thousands | 8,013 | 13,031 | 19,786 | 6,523 | 6,929 |
| Interest coverage | 0.00 | 8.66 | 7.16 | 19.19 | 9.30 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $8,013K
= 0.00
The interest coverage ratio for ScanSource Inc. exhibits notable fluctuations over the recent fiscal years. As of June 30, 2021, the company demonstrated a robust interest coverage ratio of 9.30, indicating that its earnings before interest and taxes (EBIT) were more than nine times the interest expenses, reflecting strong capacity to meet its interest obligations. In the subsequent year, June 30, 2022, this ratio significantly increased to 19.19, suggesting an improved ability to cover interest expenses, potentially driven by higher EBIT or a reduction in interest liabilities.
However, the trend shifts markedly in the following period, with the ratio declining to 7.16 by June 30, 2023. Although still above the generally accepted safety threshold of 1.5–2.0, this decrease points to a reduction in EBIT relative to interest expenses and may signal emerging pressures on the company's ability to service interest costs efficiently. The decline warrants further investigation into the company's earnings performance and interest expense structure during this period.
The interest coverage ratio appears to stabilize somewhat in the fiscal year ending June 30, 2024, at 8.66, which can be viewed as an improvement compared to 2023 and suggests resilience in earnings capacity to cover interest obligations. Nonetheless, by June 30, 2025, the ratio declines sharply to zero, implying that for this period, the company either reported no earnings before interest and taxes or faced a significant increase in interest expenses that overwhelmed earnings, hence rendering the interest coverage undefined or indicative of a potential inability to meet interest costs.
Overall, the interest coverage trend indicates periods of strong coverage interrupted by declines that could signal underlying financial stress or changes in earnings dynamics. The notable drop to zero in the most recent fiscal period highlights a critical area for further analysis to understand the causes—whether due to earnings diminishment, increased interest obligations, or other financial distress factors.
Peer comparison
Jun 30, 2025