Simulations Plus Inc (SLP)

Interest coverage

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	9,215	8,807	8,725	9,703	10,552	11,998	14,911	14,392	13,937	11,902	11,107	12,970	12,259	11,650	11,387	11,226	11,331	11,228	10,555	10,557
Interest expense (ttm)	US$ in thousands	-1,551	-1,439	-1,134	-553	-194	95	795	610	610	632	22	22	22	0	0	-109	-76	-38	0	147
Interest coverage		—	—	—	—	—	126.29	18.76	23.59	22.85	18.83	504.86	589.55	557.23	—	—	—	—	—	—	71.82

February 29, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $9,215K ÷ $-1,551K
= —

The interest coverage ratio for Simulations Plus Inc varied significantly over the periods provided. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt.

From the data, we can see that there were certain periods where the interest coverage ratio was very high, indicating a strong ability to cover interest payments with operating income. For example, in August 2021, the interest coverage ratio was 504.86 and in November 2021, it was 589.55, demonstrating a very robust ability to meet interest obligations.

However, there are also periods where the interest coverage ratio is lower, such as in May 2022 (18.76), May 2023 (22.85), and August 2023 (23.59). These lower ratios suggest that the company's operating income may not be as sufficient to cover interest expenses during these specific periods.

Overall, the interest coverage ratio fluctuates over time, indicating changes in the company's profitability and ability to service its debt. It is essential to closely monitor this ratio to assess the company's financial health and ability to meet its interest obligations in the future.