Worthington Industries Inc (WOR)
Interest coverage
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 75,782 | 36,470 | 545,597 | 287,933 |
| Interest expense | US$ in thousands | 2,090 | 1,587 | 26,759 | 31,337 | 30,346 |
| Interest coverage | 0.00 | 47.75 | 1.36 | 17.41 | 9.49 |
May 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $2,090K
= 0.00
The interest coverage ratios of Worthington Industries Inc. over the specified period reveal significant fluctuations that warrant careful analysis. As of May 31, 2021, the company's interest coverage stood at 9.49, indicating a robust ability to meet interest obligations from earnings before interest and taxes (EBIT). This ratio substantially improved to 17.41 by May 31, 2022, suggesting an even stronger capacity to cover interest expenses, likely driven by increased earnings or reduced interest obligations.
However, a dramatic decline occurred within the subsequent year, with the ratio plummeting to 1.36 as of May 31, 2023. This indicates a significant deterioration in the company's ability to service interest commitments, raising concerns about potential financial strain or decreased profitability during that period. Such a low ratio implies that EBIT barely covers interest expenses, increasing the risk of financial distress if earnings were to decline further.
Interestingly, the ratio exhibits a sharp rebound by May 31, 2024, reaching 47.75. This substantial increase suggests a period of substantial profitability or a reduction in interest expense, dramatically enhancing the company's capacity to cover interest payments and indicating a strong financial position relative to its debt obligations at that time.
However, the ratio for May 31, 2025, is reported as 0.00. This indicates that the company either did not have any interest expenses or that EBIT was insufficient to cover any interest that may have been incurred, potentially implying that the company had entirely paid off its interest-bearing debt or was in a period with no interest obligations.
In summary, Worthington Industries Inc. experienced notable volatility in its interest coverage ratios over this period. The periods of high coverage in 2021 and 2022 reflect strong financial health, while the sharp decline in 2023 highlights increased vulnerability. The subsequent spike in 2024 suggests a recovery or restructuring, although the zero ratio in 2025 warrants further investigation into the company's debt structure or interest expense policies.
Peer comparison
May 31, 2025