Worthington Industries Inc (WOR)
Interest coverage
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 377,087 | 400,981 | 395,273 | 359,485 | 297,936 | 316,686 | 437,564 | 525,745 | 561,017 | 557,504 | 322,724 | 930,408 | 811,224 | 759,073 | 920,278 | 136,754 | 163,695 | 180,723 | 160,052 | 234,701 |
| Interest expense (ttm) | US$ in thousands | 9,816 | 13,952 | 19,395 | 24,910 | 28,563 | 32,517 | 32,217 | 31,337 | 30,820 | 30,238 | 30,474 | 30,346 | 30,155 | 29,959 | 29,726 | 31,616 | 33,679 | 35,658 | 37,815 | 38,063 |
| Interest coverage | 38.42 | 28.74 | 20.38 | 14.43 | 10.43 | 9.74 | 13.58 | 16.78 | 18.20 | 18.44 | 10.59 | 30.66 | 26.90 | 25.34 | 30.96 | 4.33 | 4.86 | 5.07 | 4.23 | 6.17 |
February 29, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $377,087K ÷ $9,816K
= 38.42
The interest coverage ratio for Worthington Industries Inc has shown fluctuations over the past few quarters. As of February 29, 2024, the interest coverage ratio stands at a healthy 38.42, indicating that the company generated sufficient earnings to cover its interest expenses by over 38 times. This is a positive sign, suggesting that Worthington Industries Inc has a strong ability to meet its interest obligations.
Looking at the trend, the interest coverage ratio has generally been above 10 over the past two years, except for a dip to 4.33 in May 31, 2020. This low point may raise some concerns about the company's ability to cover its interest costs with its operating income during that period.
Overall, a high interest coverage ratio indicates that Worthington Industries Inc has been effectively managing its interest expenses relative to its earnings. Investors and creditors often see a high interest coverage ratio as a favorable indicator of a company's financial health and ability to meet its debt obligations. However, it is essential for the company to monitor its interest coverage ratio regularly to ensure it remains at healthy levels.
Peer comparison
Feb 29, 2024