Amphenol Corporation (APH)
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 | 2,576,800 | 2,581,300 | 2,115,400 | 1,632,100 | 1,604,500 |
| Interest expense | US$ in thousands | 139,500 | 128,400 | 115,500 | 115,400 | 117,600 |
| Interest coverage | 18.47 | 20.10 | 18.32 | 14.14 | 13.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,576,800K ÷ $139,500K
= 18.47
The interest coverage ratio for Amphenol Corp. has shown a generally positive trend over the past five years, indicating the company's ability to comfortably cover its interest expenses with its operating income. The ratio has consistently been above 10, which is typically considered a good threshold for indicating financial stability and ability to meet debt obligations.
In particular, the interest coverage ratio increased from 13.98 in 2019 to 18.60 in 2023, reflecting an improving ability to cover interest expenses with operating income. This steady improvement suggests that the company's earnings are more than sufficient to cover its interest obligations, providing a cushion for potential fluctuations in earnings.
Overall, the trend in Amphenol Corp.'s interest coverage ratio indicates a strong financial position and a healthy ability to manage its debt obligations over the past five years.