Toro Co (TTC)
Interest coverage
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 533,300 | 459,200 | 588,284 | 528,477 | 440,226 |
| Interest expense | US$ in thousands | 3,100 | 58,700 | 35,700 | 28,659 | 33,156 |
| Interest coverage | 172.03 | 7.82 | 16.48 | 18.44 | 13.28 |
October 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $533,300K ÷ $3,100K
= 172.03
The interest coverage ratio for Toro Co has shown fluctuations over the past five years. In 2024, the interest coverage ratio significantly improved to 172.03, indicating a substantially stronger ability to cover interest expenses with operating income. This could suggest improved profitability or lower interest expenses.
In 2023, the interest coverage ratio was relatively low at 7.82, which may raise concerns about the company's ability to meet its interest obligations from its operating earnings alone. The ratio improved in 2022 to 16.48 and further increased in 2021 to 18.44, indicating a better ability to cover interest expenses with operating income during these years.
In 2020, the interest coverage ratio was 13.28, showing a slight decline compared to the previous years. Overall, Toro Co's interest coverage ratio has demonstrated variability, with notable improvements in 2024 compared to the preceding years. Analysts should continue to monitor this ratio to assess the company's financial health and its ability to meet interest obligations in the future.