STERIS plc (STE)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	672,120	266,554	405,114	555,243	538,833
Interest expense	US$ in thousands	144,351	107,956	89,593	37,180	40,279
Interest coverage		4.66	2.47	4.52	14.93	13.38

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $672,120K ÷ $144,351K
= 4.66

STERIS plc's interest coverage ratio has shown fluctuations over the past five years, ranging from a low of 2.47 in 2023 to a high of 14.93 in 2021. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt from its operating income. Generally, a higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.

In 2024, STERIS plc's interest coverage ratio stood at 4.66, indicating that the company's operating income was 4.66 times higher than its interest expenses for the year. This suggests a stronger ability to cover interest payments compared to the previous year.

However, the trend shows some variability in the company's ability to cover interest expenses over the years, with ratios fluctuating between a moderate level to substantially higher levels in 2021 and 2020. It is important for investors and creditors to monitor this ratio closely as it provides insights into the company's financial health and risk of default.