Universal Corporation (UVV)
Interest coverage
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 241,281 | 230,353 | 192,773 | 162,168 | 143,685 |
| Interest expense | US$ in thousands | 87,066 | 66,273 | 49,300 | 27,747 | 24,954 |
| Interest coverage | 2.77 | 3.48 | 3.91 | 5.84 | 5.76 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $241,281K ÷ $87,066K
= 2.77
Universal Corporation's interest coverage ratio, which measures the company's ability to meet its interest obligations, has shown some fluctuations over the past five years. In March 2021, the interest coverage ratio was 5.76, indicating that the company generated 5.76 times the amount needed to cover its interest expenses.
By March 2023, the interest coverage ratio decreased to 3.91, suggesting a slight weakening in Universal Corporation's ability to cover its interest payments from its operating profits. This trend continued into March 2024, with the ratio falling to 3.48, and then further declining to 2.77 by March 2025.
The declining trend in Universal Corporation's interest coverage ratio from 2023 to 2025 may raise concerns about the company's ability to comfortably meet its interest payments with its operating income. It indicates a potential reduction in financial flexibility and may signal higher financial risk for the company going forward. Further analysis of the company's financial performance and debt management strategies would be necessary to assess the impact of these trends on Universal Corporation's overall financial health.
Peer comparison
Mar 31, 2025