Woodward Inc (WWD)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 501,930 | 323,666 | 234,443 | 280,081 | 317,692 |
| Interest expense | US$ in thousands | 47,959 | 47,898 | 34,545 | 34,282 | 35,811 |
| Interest coverage | 10.47 | 6.76 | 6.79 | 8.17 | 8.87 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $501,930K ÷ $47,959K
= 10.47
Over the past five years, Woodward Inc's interest coverage ratio has shown some fluctuations. In Sep 2024, the company's interest coverage ratio improved to 10.47, indicating that the company generated operating income 10.47 times higher than its interest expenses for the period. This is a positive sign as a higher interest coverage ratio suggests the company is more capable of meeting its interest obligations from its operating income.
In comparison, the interest coverage ratio was lower in Sep 2023 and Sep 2022 at 6.76 and 6.79, respectively. This may raise some concerns as these lower ratios indicate that Woodward Inc may have had a narrower margin of safety to cover its interest expenses during these periods.
However, in Sep 2021 and Sep 2020, the interest coverage ratios improved to 8.17 and 8.87, respectively. This suggests that Woodward Inc was able to generate more operating income relative to its interest expenses in those years.
Overall, Woodward Inc's interest coverage ratio has shown variability over the past five years, with the most recent year indicating a significant improvement and potentially stronger financial health in terms of meeting interest obligations. It is important for the company to continue monitoring and managing its interest coverage ratio to ensure it remains at healthy levels for long-term financial stability.