Urban Outfitters Inc (URBN)

Interest coverage

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	369,795	349,709	298,049	251,769	226,623	242,681	301,265	381,300	408,566	390,038	372,644	276,210	3,972	7,767	-15,472	-6,830	231,925	307,558	328,646	367,437
Interest expense (ttm)	US$ in thousands	1,416	-1,188	-395	-64	1,315	483	1,250	1,423	1,104	7,127	5,524	4,334	3,405	1,593	1,548	1,492	1,202	699	871	1,236
Interest coverage		261.15	—	—	—	172.34	502.45	241.01	267.96	370.08	54.73	67.46	63.73	1.17	4.88	-9.99	-4.58	192.95	440.00	377.32	297.28

January 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $369,795K ÷ $1,416K
= 261.15

The interest coverage ratio of Urban Outfitters Inc over the past few quarters has shown significant fluctuations. Starting from negative values in the first quarters of 2020 and 2021, the ratio improved substantially in the subsequent periods, reaching a peak of 502.45 in October 2022. This indicates that the company's earnings before interest and taxes were substantially higher than its interest expenses during that period, providing a comfortable margin of safety.

However, the ratio declined in the following quarters but remained relatively high, indicating a continued ability to cover interest payments comfortably. Despite some variability, the interest coverage ratio generally suggests that Urban Outfitters Inc has had a strong ability to meet its interest obligations in recent quarters. Further monitoring of this ratio is recommended to assess the company's ongoing financial health and ability to cover interest expenses in the future.