Woodward Inc (WWD)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 323,666 | 234,443 | 280,081 | 317,692 | 364,613 |
| Interest expense | US$ in thousands | 47,898 | 34,545 | 34,282 | 35,811 | 44,001 |
| Interest coverage | 6.76 | 6.79 | 8.17 | 8.87 | 8.29 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $323,666K ÷ $47,898K
= 6.76
Woodward Inc's interest coverage has shown a declining trend over the past five years, decreasing from 8.22 in 2019 to 6.92 in 2023. This indicates that the company's ability to meet its interest obligations from its operating income has weakened over time. A lower interest coverage ratio may signal increased susceptibility to financial risk and potential difficulty in servicing its debt. While a ratio above 1 implies the ability to pay interest on outstanding debt, the declining trend suggests the company's decreasing capacity to comfortably cover its interest expenses. Further investigation into the company's financial health and debt management practices would be advisable to assess the implications of this trend.