Universal Corporation (UVV)
Interest coverage
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 216,980 | 185,085 | 152,987 | 141,776 | 126,822 |
| Interest expense | US$ in thousands | 66,273 | 49,300 | 27,747 | 24,954 | 19,854 |
| Interest coverage | 3.27 | 3.75 | 5.51 | 5.68 | 6.39 |
March 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $216,980K ÷ $66,273K
= 3.27
The interest coverage ratio for Universal Corporation has shown a declining trend over the past five years. The ratio was 3.27 in 2024, which indicates that the company's operating profits were able to cover its interest expenses 3.27 times. This is a decrease from 3.75 in 2023, 5.51 in 2022, 5.68 in 2021, and 6.39 in 2020.
A lower interest coverage ratio may suggest that the company is becoming less capable of meeting its interest obligations with its operating profits. It could indicate potential financial distress or decreased profitability. Further analysis of the company's financial performance and debt structure is recommended to understand the reasons behind the declining trend in interest coverage.
Peer comparison
Mar 31, 2024