Worthington Industries Inc (WOR)
Interest coverage
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 75,782 | 36,470 | 545,597 | 287,933 | 239,174 |
| Interest expense | US$ in thousands | 1,587 | 26,759 | 31,337 | 30,346 | 31,616 |
| Interest coverage | 47.75 | 1.36 | 17.41 | 9.49 | 7.56 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $75,782K ÷ $1,587K
= 47.75
The interest coverage ratio, which indicates a company's ability to meet interest payments on its debt, shows a mixed performance for Worthington Industries Inc over the past few years.
As of May 31, 2020, the interest coverage ratio was 7.56, suggesting the company was generating enough operating income to cover its interest expenses comfortably. This ratio improved in the following year, reaching 9.49 on May 31, 2021, indicating further improvement in the company's ability to meet its interest obligations.
A significant increase was observed on May 31, 2022, with the interest coverage ratio rising to 17.41. This sharp increase reflects a strong improvement in Worthington Industries' ability to cover its interest payments with its operating income.
However, on May 31, 2023, the interest coverage ratio dropped significantly to 1.36, indicating a potential strain on the company's ability to cover its interest expenses with its operating income. This could raise concerns about the company's financial health and its ability to meet its debt obligations.
Finally, on May 31, 2024, a substantial improvement was seen with an interest coverage ratio of 47.75. This suggests Worthington Industries Inc has significantly strengthened its ability to meet interest payments, demonstrating a strong financial position at the end of the period.
In conclusion, Worthington Industries Inc has shown varying levels of interest coverage over the years, with fluctuations in its ability to cover interest expenses with operating income. It is essential for investors and stakeholders to monitor these ratios to assess the company's financial health and its capacity to service its debt obligations.
Peer comparison
May 31, 2024