Urban Outfitters Inc (URBN)

Interest coverage

		Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	506,241	389,269	222,594	405,735	6,918
Interest expense	US$ in thousands	6,069	7,662	1,315	1,104	3,405
Interest coverage		83.41	50.81	169.27	367.51	2.03

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $506,241K ÷ $6,069K
= 83.41

Urban Outfitters Inc's interest coverage ratio has displayed fluctuating trends over the past five years. Starting at 2.03 in January 31, 2021, the ratio saw a significant improvement to 367.51 in January 31, 2022, indicating a substantial increase in the company's ability to cover its interest expenses with operating income. However, this exceptionally high ratio may have been influenced by certain non-recurring or extraordinary factors.

Subsequently, the interest coverage ratio decreased to 169.27 in January 31, 2023, suggesting a lower but still healthy level of ability to meet interest obligations. This was followed by a further decline to 50.81 in January 31, 2024, possibly signaling challenges in generating enough operating income to cover interest expenses efficiently.

In the most recent period ending January 31, 2025, the interest coverage ratio improved to 83.41, indicating a better capacity to pay interest costs compared to the previous year. Overall, while the ratio has shown variation, it is essential for investors and stakeholders to closely monitor Urban Outfitters Inc's interest coverage ratio to assess its financial health and ability to meet debt obligations.