ScanSource Inc (SCSC)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 72,784 | 97,564 | 93,478 | 99,356 | 99,017 | 103,262 | 116,914 | 130,637 | 141,636 | 140,710 | 139,135 | 129,785 | 125,145 | 121,736 | 108,166 | 93,878 | 73,205 | -58,797 | -72,207 | -70,485 |
| Interest expense (ttm) | US$ in thousands | 8,014 | 7,999 | 8,164 | 9,553 | 13,029 | 16,508 | 20,222 | 21,923 | 19,786 | 16,109 | 11,877 | 8,310 | 6,522 | 6,279 | 6,372 | 6,675 | 6,928 | 6,545 | 8,067 | 9,583 |
| Interest coverage | 9.08 | 12.20 | 11.45 | 10.40 | 7.60 | 6.26 | 5.78 | 5.96 | 7.16 | 8.73 | 11.71 | 15.62 | 19.19 | 19.39 | 16.98 | 14.06 | 10.57 | -8.98 | -8.95 | -7.36 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $72,784K ÷ $8,014K
= 9.08
The interest coverage ratios for ScanSource Inc over the specified periods demonstrate a notable trend characterized by initial negative values, subsequent recovery, and subsequent fluctuations. From September 30, 2020, through March 31, 2021, the ratio remained negative, with figures of -7.36, -8.95, and -8.98, indicating the company's inability to generate sufficient operating income to cover interest expenses during this period, likely reflecting financial stress or significant non-operational costs impacting earnings.
Beginning in June 30, 2021, a marked turnaround is observed, with the interest coverage ratio turning positive at 10.57 and further increasing to 14.06 by September 30, 2021. This shift suggests an improvement in operating performance, enabling the company to comfortably meet its interest obligations. The ratio continued to demonstrate strength, reaching 16.98 at the end of 2021, and further climbing to 19.39 in March 2022, indicating robust earnings relative to interest costs.
Throughout 2022, the ratios remained relatively high, with values of 19.19 (June), 15.62 (September), and 11.71 (December). Although there was a slight decrease, the ratios still reflected a sufficient margin for covering interest expenses. However, a declining trend emerges in 2023, with ratios decreasing to 8.73 in March, 7.16 in June, and further down to 5.96 in September, and continuing at similar levels through December. This indicates a narrowing of the interest coverage margin, suggesting either a decline in operating income, an increase in interest expenses, or a combination of both.
Projected figures for 2024 and 2025 show an optimistic outlook, with ratios increasing again, reaching 10.40 (September 2024), 11.45 (December 2024), 12.20 (March 2025), and 9.08 (June 2025). These projections imply that the company's ability to service interest obligations is expected to improve, possibly due to enhanced earnings or diminished debt levels.
Overall, the trend in ScanSource Inc.'s interest coverage ratio indicates a recent period of financial strength following prior challenges. The ratio's fluctuations reflect varying operational performance and financial strategy impacts, but current and projected data suggest that the company is maintaining an acceptable margin of safety regarding its interest obligations, with ratios generally well above the critical threshold of 1.0, except for the earlier negative figures.
Peer comparison
Jun 30, 2025