Toro Co (TTC)
Interest coverage
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 459,200 | 588,284 | 528,477 | 440,226 | 350,968 |
| Interest expense | US$ in thousands | 58,700 | 35,700 | 28,659 | 33,156 | 28,835 |
| Interest coverage | 7.82 | 16.48 | 18.44 | 13.28 | 12.17 |
October 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $459,200K ÷ $58,700K
= 7.82
The interest coverage ratio for Toro Co. has exhibited fluctuations over the past five years, ranging from 9.91 to 18.08. In 2023, the interest coverage ratio decreased to 9.91 from 16.11 in 2022, indicating a reduced ability to cover interest expenses from operating income. The company's interest coverage was at its highest in 2021 at 18.08, demonstrating a strong ability to meet interest obligations. However, it declined in 2022 and 2023. This trend suggests that the company may need to carefully manage its debt and profitability to ensure it can effectively cover its interest expenses in the future.