Toro Co (TTC)
Interest coverage
| Feb 2, 2024 | Oct 31, 2023 | Aug 4, 2023 | Feb 3, 2023 | Oct 31, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 31, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 31, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Oct 31, 2019 | Aug 2, 2019 | May 3, 2019 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 300,504 | 362,316 | 430,815 | 620,464 | 575,663 | 499,411 | 458,302 | 468,441 | 518,280 | 540,724 | 538,082 | 487,396 | 440,226 | 395,715 | 356,657 | 370,501 | 350,968 | 341,871 | 354,526 | 380,925 |
| Interest expense (ttm) | US$ in thousands | 60,165 | 55,484 | 49,788 | 42,825 | 35,738 | 31,216 | 29,050 | 28,150 | 28,659 | 29,699 | 30,987 | 32,522 | 33,156 | 33,514 | 34,214 | 32,249 | 28,835 | 25,322 | 20,994 | 19,020 |
| Interest coverage | 4.99 | 6.53 | 8.65 | 14.49 | 16.11 | 16.00 | 15.78 | 16.64 | 18.08 | 18.21 | 17.36 | 14.99 | 13.28 | 11.81 | 10.42 | 11.49 | 12.17 | 13.50 | 16.89 | 20.03 |
February 2, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $300,504K ÷ $60,165K
= 4.99
The interest coverage ratio for Toro Co. has shown a decreasing trend from Q2 2022 to Q1 2024. This ratio indicates the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally preferable as it suggests the company has a strong ability to meet its interest obligations.
The interest coverage ratio of 8.79 in Q1 2024 indicates that Toro Co.'s operating income is able to cover its interest expenses approximately 8.79 times. While this is still a relatively healthy ratio, it has decreased from the previous quarters, which may signal a potential decline in the company's ability to cover its interest payments.
It is important for investors and stakeholders to monitor this trend closely as a declining interest coverage ratio could indicate deteriorating financial health and may raise concerns about the company's ability to meet its debt obligations in the future.