Scotts Miracle-Gro Company (SMG)
Interest coverage
| 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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -179,900 | -174,400 | 5,100 | -617,900 | -440,800 | -439,900 | -244,000 | 622,600 | 661,700 | 751,000 | 813,900 | 777,900 | 714,400 | 590,800 | 514,700 | 516,800 | 709,800 | 707,300 | 601,700 | 461,500 |
| Interest expense (ttm) | US$ in thousands | 178,200 | 178,100 | 173,100 | 157,000 | 137,000 | 118,100 | 104,700 | 95,600 | 86,600 | 78,900 | 73,900 | 72,300 | 75,700 | 79,600 | 84,800 | 90,400 | 96,600 | 101,800 | 102,800 | 100,100 |
| Interest coverage | -1.01 | -0.98 | 0.03 | -3.94 | -3.22 | -3.72 | -2.33 | 6.51 | 7.64 | 9.52 | 11.01 | 10.76 | 9.44 | 7.42 | 6.07 | 5.72 | 7.35 | 6.95 | 5.85 | 4.61 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-179,900K ÷ $178,200K
= -1.01
The interest coverage ratio of Scotts Miracle-Gro Company has shown fluctuations over the past few quarters. A negative interest coverage ratio indicates that the company's earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses during those periods. This may raise concerns about the company's ability to meet its debt obligations using its operating income.
The ratio improved significantly from negative figures in early 2023 to positive values by mid to late 2023, showing a positive trend. The higher positive values in late 2023 and early 2022 indicate that the company's earnings were more than sufficient to cover its interest expenses, which is a positive sign for creditors and investors. However, there was a notable decline in the ratio in early 2020.
Overall, fluctuations in the interest coverage ratio suggest variations in the company's financial performance and ability to manage its debt obligations. Investors and stakeholders may closely monitor this ratio to assess the company's financial health and risk of default on its debts.
Peer comparison
Dec 31, 2023