John Wiley & Sons (WLY)
Interest coverage
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 195,425 | -128,204 | 75,845 | 225,263 | 190,595 |
| Interest expense | US$ in thousands | 52,547 | 49,003 | 37,745 | 19,802 | 18,383 |
| Interest coverage | 3.72 | -2.62 | 2.01 | 11.38 | 10.37 |
April 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $195,425K ÷ $52,547K
= 3.72
The interest coverage ratio for John Wiley & Sons has exhibited notable fluctuations over the specified period. As of April 30, 2021, the company maintained a strong interest coverage ratio of 10.37, indicating a robust capability to meet interest obligations from operating earnings. This positive trend continued into April 30, 2022, with an improved ratio of 11.38, reflecting an even stronger buffer between earnings and interest expenses.
However, a significant deterioration is observed in the subsequent year, with the ratio declining sharply to 2.01 as of April 30, 2023. Although still positive, this considerably reduced figure suggests a narrowing margin of safety in covering interest expenses solely through operating earnings, raising concerns about financial stress or increased debt burdens.
The situation worsened markedly by April 30, 2024, when the interest coverage ratio drops into negative territory at -2.62. This indicates that operating earnings are insufficient to cover interest expenses, and the company likely faced a period of losses or significant expenses exceeding earnings, undermining its capacity to meet debt obligations solely from ongoing operations.
By April 30, 2025, the interest coverage ratio stabilizes at zero, implying that operating earnings are exactly equal to interest expenses. This equilibrium point suggests that the company is neither generating additional earnings beyond interest requirements nor experiencing losses that impair its ability to service debt, but it also leaves little margin for error or buffer against financial shocks.
Overall, the trend depicts a substantial deterioration in John Wiley & Sons’ interest coverage over the analyzed period, transitioning from a position of strong financial health to one of potential concern due to declining earnings capacity to service interest obligations.
Peer comparison
Apr 30, 2025