American Axle & Manufacturing (AXL)
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 | 251,400 | 252,200 | 236,400 | 210,300 | 171,400 | 194,500 | 237,300 | 238,800 | 271,600 | 206,600 | 166,700 | 164,300 | 217,900 | 353,200 | 484,300 | 213,200 | -362,400 | -905,200 | -1,173,300 | -848,800 |
Interest expense (ttm) | US$ in thousands | 186,000 | 194,000 | 199,600 | 201,900 | 203,400 | 193,800 | 187,800 | 180,300 | 174,500 | 176,700 | 181,600 | 188,800 | 195,200 | 203,000 | 207,200 | 211,900 | 212,300 | 213,400 | 213,800 | 215,400 |
Interest coverage | 1.35 | 1.30 | 1.18 | 1.04 | 0.84 | 1.00 | 1.26 | 1.32 | 1.56 | 1.17 | 0.92 | 0.87 | 1.12 | 1.74 | 2.34 | 1.01 | -1.71 | -4.24 | -5.49 | -3.94 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $251,400K ÷ $186,000K
= 1.35
American Axle & Manufacturing's interest coverage ratio, as indicated by the provided data, shows a fluctuating trend over the analyzed time period. The interest coverage ratio is a measure of a company's ability to make interest payments on its debt. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
From March 31, 2020 to December 31, 2021, the interest coverage ratio remained consistently below 1, indicating that the company was unable to cover its interest expenses with its operating income during this time frame. However, starting from March 31, 2021, there was a gradual improvement in the interest coverage ratio, with the ratio moving above 1. This suggests that the company's operating income started to better cover its interest expenses.
The interest coverage ratio continued to improve further into 2022 and 2023, reaching its peak in September 30, 2022, and June 30, 2023, showing a more stable financial position in terms of meeting interest payment obligations. However, there was a slight decline in the ratio towards the end of the analyzed period, although it remained above 1, indicating that the company's operating income still covered its interest expenses.
Overall, the trend in American Axle & Manufacturing's interest coverage ratio shows an improvement in its ability to cover interest expenses with operating income from 2021 onwards, reflecting a positive direction in the company's financial health in this aspect.
Peer comparison
Dec 31, 2024