Armstrong World Industries Inc (AWI)
Interest coverage
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 358,000 | 375,300 | 350,200 | 333,600 | 336,800 | 312,000 | 295,800 | 287,700 | 272,000 | 267,800 | 274,700 | 263,500 | 243,200 | 245,000 | 232,700 | -117,600 | -91,300 | -65,700 | -49,900 | 310,000 |
| Interest expense (ttm) | US$ in thousands | 37,300 | 36,900 | 35,600 | 35,300 | 35,900 | 34,100 | 30,700 | 27,100 | 23,400 | 22,500 | 22,300 | 22,900 | 22,800 | 22,800 | 23,100 | 24,100 | 25,500 | 31,100 | 34,700 | 38,400 |
| Interest coverage | 9.60 | 10.17 | 9.84 | 9.45 | 9.38 | 9.15 | 9.64 | 10.62 | 11.62 | 11.90 | 12.32 | 11.51 | 10.67 | 10.75 | 10.07 | -4.88 | -3.58 | -2.11 | -1.44 | 8.07 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $358,000K ÷ $37,300K
= 9.60
The interest coverage ratio of Armstrong World Industries Inc has shown fluctuations over the period from December 31, 2019, to December 31, 2024. In December 2019, the interest coverage ratio was 8.07, indicating that the company generated sufficient operating income to cover its interest expenses 8.07 times over. However, the ratio turned negative in the following quarters, indicating that the company's operating income was insufficient to cover its interest expenses during those periods.
From March 2021 onwards, the interest coverage ratio improved consistently, reaching a peak of 12.32 in March 2022. This indicates that from March 2021 to March 2022, the company was in a strong position to meet its interest obligations with its operating income.
Although the interest coverage ratio experienced a slight decline after March 2022, hovering around 9 to 10 times from September 2022 to December 2024, the company maintained a relatively stable ability to cover its interest expenses over this period.
Overall, while there were periods of concern indicated by negative interest coverage ratios, Armstrong World Industries Inc managed to improve its financial health and demonstrate its ability to comfortably meet its interest obligations with its operating income in recent quarters.
Peer comparison
Dec 31, 2024