AAON Inc (AAON)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 227,494 | 210,208 | 182,244 | 147,957 | 126,761 | 85,606 | 69,043 | 73,802 | 69,253 | 89,528 | 95,522 | 92,502 | 101,836 | 99,344 | 88,243 | 83,337 | 67,011 | 60,911 | 66,042 | 63,268 |
| Interest expense (ttm) | US$ in thousands | 82 | 68 | 54 | 43 | 43 | 44 | 44 | 44 | 43 | 43 | 43 | 43 | 43 | 97 | 86 | 76 | 66 | 196 | 196 | 196 |
| Interest coverage | 2,774.32 | 3,091.29 | 3,374.89 | 3,440.86 | 2,947.93 | 1,945.59 | 1,569.16 | 1,677.32 | 1,610.53 | 2,082.05 | 2,221.44 | 2,151.21 | 2,368.28 | 1,024.16 | 1,026.08 | 1,096.54 | 1,015.32 | 310.77 | 336.95 | 322.80 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $227,494K ÷ $82K
= 2,774.32
Interest coverage is an important financial ratio that indicates a company's ability to meet its interest obligations with its operating income. AAON Inc.'s interest coverage ratio has shown fluctuations over the past eight quarters.
In Q1 2022, AAON Inc. had a very strong interest coverage ratio of 227.90, indicating that the company's operating income was significantly higher than its interest expenses. However, the interest coverage ratio declined in subsequent quarters, reaching its lowest point of 39.73 in Q2 2023. Despite the fluctuations, the company's interest coverage ratio has generally remained above 1, indicating that it has been able to meet its interest obligations.
It is worth noting that a high interest coverage ratio reflects a lower financial risk for the company, as it suggests that the company is comfortably able to cover its interest payments. On the other hand, a declining interest coverage ratio may signal potential financial distress if the trend continues.
Overall, AAON Inc. should continue to monitor its interest coverage ratio and take steps to ensure that it remains at a healthy level to safeguard its financial stability.
Peer comparison
Dec 31, 2023