Smith AO Corporation (AOS)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 707,700 | 738,200 | 758,900 | 763,900 | 745,500 | 328,000 | 296,300 | 250,300 | 233,100 | 655,800 | 676,100 | 660,900 | 629,900 | 599,600 | 571,100 | 508,400 | 451,200 | 416,300 | 393,300 | 439,400 |
| Interest expense (ttm) | US$ in thousands | 6,700 | 5,400 | 6,300 | 9,000 | 12,000 | 14,300 | 14,300 | 11,900 | 9,400 | 7,400 | 6,000 | 4,800 | 4,300 | 3,900 | 4,500 | 6,100 | 7,300 | 8,800 | 10,300 | 11,200 |
| Interest coverage | 105.63 | 136.70 | 120.46 | 84.88 | 62.12 | 22.94 | 20.72 | 21.03 | 24.80 | 88.62 | 112.68 | 137.69 | 146.49 | 153.74 | 126.91 | 83.34 | 61.81 | 47.31 | 38.18 | 39.23 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $707,700K ÷ $6,700K
= 105.63
Smith AO Corporation's interest coverage ratio has exhibited fluctuations over the past few years. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.
From March 31, 2020, to June 30, 2021, the interest coverage ratio showed a consistent upward trend, indicating improved ability to cover its interest expenses with operating income. This was a positive sign for the company's financial health and stability during this period.
However, from September 30, 2021, to June 30, 2022, there was a decline in the interest coverage ratio, indicating a potential reduction in the company's ability to cover its interest expenses. This downward trend may raise concerns about the company's financial capacity to service its debt obligations.
Subsequently, from December 31, 2022, to December 31, 2024, there were fluctuations in the interest coverage ratio, showing inconsistent performance in managing its interest obligations. The decrease in the interest coverage ratio suggests that the company may be facing challenges in generating sufficient operating income to cover its interest expenses.
Overall, it is essential for Smith AO Corporation to closely monitor its interest coverage ratio to ensure it maintains a healthy financial position and can meet its debt obligations in a sustainable manner.
Peer comparison
Dec 31, 2024