Smith AO Corporation (AOS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 745,500 | 233,100 | 629,900 | 451,200 | 483,100 |
| Interest expense | US$ in thousands | 12,000 | 9,400 | 4,300 | 7,300 | 11,000 |
| Interest coverage | 62.12 | 24.80 | 146.49 | 61.81 | 43.92 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $745,500K ÷ $12,000K
= 62.12
The interest coverage ratio for A.O. Smith Corp. has demonstrated a generally strong trend over the past five years, indicating the company's ability to meet its interest obligations comfortably.
The interest coverage ratio was highest in 2021 at 141.74, suggesting a significant buffer to cover interest expenses with operating income. This level of coverage indicates a robust financial position and the ability to service debt obligations efficiently.
In 2023, the interest coverage ratio decreased slightly to 63.12 but remains at a healthy level, indicating that the company's operating income is still more than sufficient to cover its interest payments.
Overall, A.O. Smith Corp.'s interest coverage ratios over the years reflect a financially stable and sound business with consistent profitability and strong cash flow generation to meet its interest obligations.
Peer comparison
Dec 31, 2023