Ametek Inc (AME)

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 1,688,207 1,648,678 1,604,546 1,556,254 1,511,878 1,470,161 1,422,558 1,367,940 1,303,551 1,239,916 1,169,034 1,085,958 1,168,371 1,163,224 1,189,501 1,252,454 1,158,229 1,146,293 1,115,075 1,092,006
Interest expense (ttm) US$ in thousands 81,795 80,699 82,558 84,185 83,186 80,681 80,912 81,004 80,381 79,330 80,041 82,268 86,062 89,642 89,763 88,569 88,481 85,755 83,838 83,147
Interest coverage 20.64 20.43 19.44 18.49 18.17 18.22 17.58 16.89 16.22 15.63 14.61 13.20 13.58 12.98 13.25 14.14 13.09 13.37 13.30 13.13

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,688,207K ÷ $81,795K
= 20.64

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payments on outstanding debt obligations. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.

Based on the data provided for Ametek Inc, the interest coverage ratio has been consistently strong and stable over the past eight quarters. The interest coverage ratios range from a low of 16.90 in Q1 2022 to a high of 20.87 in Q4 2023.

These consistently high interest coverage ratios indicate that Ametek Inc has more than sufficient earnings to cover its interest expenses, providing a buffer in case of any fluctuations in operating performance or interest rates. A higher interest coverage ratio is generally seen as a positive indicator of a company's financial health and ability to service its debt obligations.

In conclusion, the strong and stable interest coverage ratios of Ametek Inc suggest a solid financial position and the ability to meet its interest payment obligations comfortably.