Worthington Industries Inc (WOR)
Interest coverage
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 122,732 | 95,977 | 50,696 | 5,248 | -30,997 | 14,008 | 47,358 | -654 | 70,186 | 115,017 | 113,872 | 257,651 | 315,248 | 378,390 | 415,410 | 246,070 | 153,709 | 49,560 | 6,974 | 167,946 |
| Interest expense (ttm) | US$ in thousands | 2,210 | 2,159 | 1,581 | 2,717 | 5,311 | 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 |
| Interest coverage | 55.53 | 44.45 | 32.07 | 1.93 | -5.84 | 1.43 | 3.39 | -0.03 | 2.82 | 4.03 | 3.50 | 8.00 | 10.06 | 12.28 | 13.74 | 8.07 | 5.07 | 1.64 | 0.23 | 5.65 |
May 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $122,732K ÷ $2,210K
= 55.53
The interest coverage ratios for Worthington Industries Inc. over the specified periods exhibit considerable fluctuation, reflecting variations in the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT).
During the fiscal periods ending August 31, 2020, and May 31, 2021, the interest coverage ratios were relatively strong, at 5.65 and 5.07 respectively, indicating that the company earned approximately five times its interest expenses. This suggests a comfortable margin of safety in covering interest obligations during these periods. However, a significant decline was observed by November 30, 2020, with the ratio plunging to an unsustainable 0.23, implying that the company's earnings before interest and taxes were insufficient to cover interest expenses, which indicates financial distress at that point.
Following this, the ratio rebounded sharply, reaching 1.64 by February 28, 2021, and then increased further to 8.07 by August 31, 2021, and peaked at 13.74 on November 30, 2021. These elevated ratios suggest a strong capacity to cover interest expenses, potentially reflecting periods of robust profitability.
From late 2021 through early 2023, the interest coverage ratios remained relatively healthy, with values generally above 3.0, peaking at 12.28 in February 2022. This sustained level points to periods of stable earnings sufficient to comfortably cover interest obligations.
However, starting in the latter part of 2022, the ratio declined notably, reaching as low as negative values, such as -0.03 on August 31, 2023, and further down to -5.84 on May 31, 2024. These negative ratios indicate that earnings before interest and taxes were insufficient to cover interest expenses, highlighting periods of severe financial strain or accounting anomalies.
In the most recent periods, the ratios show some recovery, with +3.39 on November 30, 2023, and modest positive values subsequently, although still below historic highs. Projections for future periods reveal significant uncertainty, with estimated interest coverage ratios of 44.45 and 55.53 for February and May 2025, respectively, suggesting a possible resurgence in earnings capability or changes in financial structure.
Overall, the interest coverage trend indicates periods of financial strength interspersed with episodes of distress, with recent ratios fluctuating around or below breakeven levels. The substantial variability underscores the importance of ongoing operational performance and financial management in maintaining adequate coverage of interest obligations.
Peer comparison
May 31, 2025