Advanced Drainage Systems Inc (WMS)
Interest coverage
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 675,547 | 690,176 | 714,298 | 718,126 | 723,766 | 714,056 | 682,417 | 701,740 | 721,503 | 676,661 | 666,302 | 559,479 | 416,824 | 369,106 | 357,129 | 368,687 | 368,357 | 356,202 | 301,095 | 264,708 |
| Interest expense (ttm) | US$ in thousands | 91,803 | 91,952 | 91,189 | 89,974 | 88,862 | 86,832 | 84,502 | 80,822 | 70,182 | 57,784 | 46,539 | 36,715 | 33,550 | 32,995 | 32,672 | 33,595 | 35,658 | 39,687 | 44,445 | 87,417 |
| Interest coverage | 7.36 | 7.51 | 7.83 | 7.98 | 8.14 | 8.22 | 8.08 | 8.68 | 10.28 | 11.71 | 14.32 | 15.24 | 12.42 | 11.19 | 10.93 | 10.97 | 10.33 | 8.98 | 6.77 | 3.03 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $675,547K ÷ $91,803K
= 7.36
The interest coverage ratio for Advanced Drainage Systems Inc has shown a positive trend over the past years, indicating the company's ability to meet its interest obligations comfortably. The ratio has consistently increased from 3.03 as of June 30, 2020, to 7.36 as of March 31, 2025.
The company's interest coverage ratio has improved steadily, reaching a peak of 15.24 on June 30, 2022. This indicates that the company's earnings before interest and taxes (EBIT) were 15.24 times higher than its interest expenses for that period, reflecting a strong financial position.
However, it is worth noting that the interest coverage ratio began to decrease after June 30, 2022, showing a slight decline in the company's ability to cover its interest costs. This decrease may be attributed to changes in interest rates, the company's debt structure, or fluctuations in earnings.
Overall, the interest coverage ratio for Advanced Drainage Systems Inc remains relatively healthy, suggesting that the company has sufficient earnings to cover its interest expenses, although monitoring any further declines in the ratio may be prudent to assess potential financial risks.