Worthington Steel Inc (WS)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 79,100 | 144,500 | 195,300 | 169,100 | 205,050 | 235,050 | 179,250 | 166,550 | 133,060 | 78,920 |
| Interest expense (ttm) | US$ in thousands | 7,100 | 8,500 | 10,000 | 8,100 | 6,000 | 3,600 | 1,200 | 1,900 | 2,300 | 2,300 |
| Interest coverage | 11.14 | 17.00 | 19.53 | 20.88 | 34.18 | 65.29 | 149.38 | 87.66 | 57.85 | 34.31 |
May 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $79,100K ÷ $7,100K
= 11.14
The interest coverage ratio for Worthington Steel Inc exhibits a notable upward trend from February 28, 2023, through November 30, 2023, indicating a strengthening ability to meet interest obligations during this period. Specifically, the ratio increases markedly from 34.31 in late February 2023 to a peak of 149.38 in late November 2023, suggesting enhanced earnings relative to interest expenses and a robust capacity to service debt.
Following this peak, the ratio declines significantly, falling to 65.29 by February 29, 2024, and continuing downward to 20.88 by August 31, 2024. This decline reflects a reduction in earnings relative to interest expenses, potentially signaling increased financial pressure or a temporary downturn in profitability. Despite this decrease, the coverage remains above 20, indicating the company retains adequate capacity to cover interest expenses at this stage.
By November 30, 2024, the ratio stabilizes further at approximately 19.53, and subsequent periods show a continued decline to 17.00 in February 2025 and down to 11.14 by May 2025. These lower figures suggest a gradual tightening of the company's interest coverage, approaching levels that may indicate increased risk if the downward trend persists.
Overall, Worthington Steel Inc demonstrates strong interest coverage in the early part of the analyzed period, with ratios well above the typical safety threshold of 2.0 to 3.0, but exhibits a clear downward trajectory thereafter. The decline warrants ongoing monitoring to assess whether the company's earnings capacity can sustain its debt obligations, especially if the trend continues into future periods.
Peer comparison
May 31, 2025