Valvoline Inc (VVV)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 367,200 | 247,200 | 220,300 | 240,100 | 160,200 |
| Interest expense | US$ in thousands | 11,100 | 10,200 | 9,300 | 8,000 | 3,000 |
| Interest coverage | 33.08 | 24.24 | 23.69 | 30.01 | 53.40 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $367,200K ÷ $11,100K
= 33.08
The interest coverage ratio for Valvoline Inc has shown fluctuations over the past five years. The ratio indicates the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally considered favorable as it signifies that the company is generating sufficient operating income to cover its interest expenses.
In the most recent fiscal year ending September 30, 2024, Valvoline Inc's interest coverage ratio was 33.08, which indicates a strong ability to cover its interest obligations. This represents an improvement compared to the previous year when the ratio was 24.24.
Despite the variability seen year-over-year, the company's interest coverage ratio has consistently remained above 20 in the past five years. This demonstrates financial stability and a healthy operating performance. However, it is essential for investors and stakeholders to monitor the trend of the interest coverage ratio over time to ensure the company's ability to meet its debt obligations.
Peer comparison
Sep 30, 2024