Scotts Miracle-Gro Company (SMG)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 135,200 | -275,200 | -440,000 | 751,200 | 590,700 |
| Interest expense | US$ in thousands | 158,800 | 178,100 | 118,100 | 78,900 | 79,600 |
| Interest coverage | 0.85 | -1.55 | -3.73 | 9.52 | 7.42 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $135,200K ÷ $158,800K
= 0.85
Based on the interest coverage ratios provided for Scotts Miracle-Gro Company over the past five years, there are fluctuations in the company's ability to cover its interest expenses with its operating profits.
In 2024, the interest coverage ratio stands at 0.85, indicating that the company's operating profits were only sufficient to cover 85% of its interest expenses for that year. This suggests a potential risk as the company may be struggling to meet its interest obligations.
In the preceding year, the interest coverage ratio was -1.55, which implies that the company's operating profits were insufficient to cover its interest expenses, resulting in a negative coverage. This is a concerning trend as it indicates a significant financial strain on the company.
Similarly, in 2022 and 2021, the interest coverage ratios were -3.73 and 9.52, respectively. The negative ratio in 2022 indicates a continued struggle to meet interest payments, while the ratio of 9.52 in 2021 suggests an improvement in the company's ability to cover interest expenses compared to the previous year.
In 2020, Scotts Miracle-Gro Company had an interest coverage ratio of 7.42, indicating a healthy ability to cover its interest expenses with operating profits. This suggests a strong financial position relative to the other years analyzed.
Overall, the fluctuating trend in Scotts Miracle-Gro Company's interest coverage ratios over the past five years highlights the importance of monitoring the company's financial health and ability to meet its interest obligations.
Peer comparison
Sep 30, 2024