Hennessy Advisors(Hnna) Financials: Interest Coverage Compared To Industry Average, Plus Other Key Ratios
Solvency Trend (Last 5 Years)
Solvency - interest coverage
This chart shows the historical trend of interest coverage for HNNA compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Interest Coverage
Definition: Interest coverage tells you how easily the company can pay interest on its debt using operating profits. It’s like asking: “Can the company comfortably make its loan payments, or is it barely scraping by?” The higher the ratio, the safer. A very low ratio means debt payments may strain the business, especially if profits drop.
Interpretation:
• In '2022', HNNA's interest coverage was 4.74, indicating the firm's ability to meet its interest obligations. Industry average for Investment Managers in '2022' stood at 2.46.
• In '2023', HNNA's interest coverage was 3.93, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Investment Managers in '2023' stood at 1.13. Industry average declined by 1.33 from previous year.
• In '2024', HNNA's interest coverage was 5.27, indicating the firm's ability to meet its interest obligations. The increase since '2023' reflects strengthening financial performance. Industry average for Investment Managers in '2024' stood at 2.85. Industry average increased by 1.71 compared to previous year.
Overall, HNNA's interest coverage has steadily improved over the past 3 years.
Formula: Interest Coverage = EBIT / Interest Expense
Good Range: Minimum 3-5 desirable; below 1 is risky.