Advanced Drainage Systems Inc (WMS)
Interest coverage
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 732,131 | 722,385 | 693,606 | 713,154 | 719,310 | 674,456 | 660,283 | 554,259 | 411,918 | 364,031 | 336,680 | 346,693 | 344,525 | 318,394 | 276,451 | 212,096 | -95,349 | -95,403 | -111,520 | -121,990 |
| Interest expense (ttm) | US$ in thousands | 2,044 | 2,043 | 2,043 | 1,586 | 1,419 | 1,005 | 589 | 631 | 382 | 375 | 376 | 379 | 382 | 389 | 388 | 34,400 | 34,476 | 39,769 | 39,848 | 5,933 |
| Interest coverage | 358.19 | 353.59 | 339.50 | 449.66 | 506.91 | 671.10 | 1,121.02 | 878.38 | 1,078.32 | 970.75 | 895.43 | 914.76 | 901.90 | 818.49 | 712.50 | 6.17 | -2.77 | -2.40 | -2.80 | -20.56 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $732,131K ÷ $2,044K
= 358.19
The interest coverage ratio for Advanced Drainage Systems Inc has shown significant variability over the historical periods provided. Generally, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income.
Looking at the trend, the interest coverage ratio has been quite healthy and consistently above 300 in recent quarters, indicating a strong ability to cover interest payments. However, there are a couple of concerning outliers where the interest coverage ratio dropped significantly below 10, particularly in the quarters ended June 30, 2020, and September 30, 2020. This could suggest potential challenges in meeting interest expenses during those periods.
It is important for investors and analysts to further investigate the reasons behind these deviations to understand whether they are temporary anomalies or indicative of underlying issues with the company's financial health. Overall, the interest coverage ratio for Advanced Drainage Systems Inc demonstrates a mix of strong and weak performances in meeting interest payment obligations.