Vestis Corporation (VSTS)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 217,909 | 192,243 | 96,239 | 149,720 |
| Interest expense | US$ in thousands | 10 | 2,284 | — | 206 |
| Interest coverage | 21,790.90 | 84.17 | — | 726.80 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $217,909K ÷ $10K
= 21,790.90
The interest coverage of Vestis Corporation has varied significantly over the past four years. In September 2020, the interest coverage ratio was 726.80, signaling a strong ability to cover its interest expenses several times over. However, in September 2022, the interest coverage ratio plummeted to 84.17, indicating a potential strain on the company's ability to cover its interest obligations with its operating income.
The latest data for September 2023 shows a substantial improvement in the interest coverage ratio to 21,790.90, which is an exceptionally high figure. This sharp increase suggests that Vestis Corporation's operating income has significantly strengthened, enabling the company to cover its interest expenses many times over.
Overall, the trend in Vestis Corporation's interest coverage indicates both volatility and improvement in its ability to meet interest obligations. It is essential for stakeholders to monitor this ratio closely to ensure the company maintains a healthy financial position moving forward.
Peer comparison
Sep 30, 2023