Worthington Steel Inc (WS)
Interest coverage
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 213,953 | 154,253 | 80,653 | 130,213 |
| Interest expense (ttm) | US$ in thousands | 5,500 | 3,100 | 1,100 | 900 |
| Interest coverage | 38.90 | 49.76 | 73.32 | 144.68 |
May 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $213,953K ÷ $5,500K
= 38.90
The interest coverage ratio for Worthington Steel Inc has shown a declining trend over the past four quarters. From an impressive high of 144.68 in August 31, 2023, the ratio has steadily decreased to 38.90 in May 31, 2024. This decline indicates that the company's ability to cover its interest expenses with operating earnings has weakened over this period.
A high interest coverage ratio is generally viewed positively as it suggests that the company is generating more than enough operating income to comfortably meet its interest obligations. In contrast, a declining interest coverage ratio can be a cause for concern as it may indicate potential financial distress or an increasing debt burden relative to earnings.
Overall, Worthington Steel Inc's interest coverage ratio should be closely monitored to ensure that the company remains financially sound and is able to meet its debt obligations without difficulty.
Peer comparison
May 31, 2024