Axalta Coating Systems Ltd (AXTA)
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 | 700,000 | 669,700 | 634,000 | 557,900 | 566,900 | 506,000 | 467,900 | 435,400 | 396,500 | 396,600 | 404,700 | 506,800 | 474,200 | 508,400 | 520,500 | 260,100 | 271,700 | 250,400 | 235,000 | 454,200 |
| Interest expense (ttm) | US$ in thousands | 205,000 | 213,400 | 214,500 | 219,100 | 213,100 | 196,400 | 176,300 | 155,200 | 139,800 | 134,600 | 133,400 | 133,300 | 134,200 | 138,200 | 144,200 | 146,900 | 149,900 | 152,500 | 152,900 | 157,800 |
| Interest coverage | 3.41 | 3.14 | 2.96 | 2.55 | 2.66 | 2.58 | 2.65 | 2.81 | 2.84 | 2.95 | 3.03 | 3.80 | 3.53 | 3.68 | 3.61 | 1.77 | 1.81 | 1.64 | 1.54 | 2.88 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $700,000K ÷ $205,000K
= 3.41
Interest coverage is a financial ratio that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio signifies a stronger ability to meet interest obligations.
Analyzing the interest coverage ratio of Axalta Coating Systems Ltd over the years shows some fluctuations in the company's ability to cover its interest expenses. As of December 31, 2024, the interest coverage ratio stood at 3.41, indicating that the company generated operating income 3.41 times more than its interest expenses, which is a positive sign.
Looking at the trend, there were fluctuations in the interest coverage ratio throughout the periods analyzed, with some years showing a decrease (e.g., June 30, 2020 at 1.54) and others showing an increase (e.g., September 30, 2021 at 3.68). Overall, the trend seems to show some stability and improvement in the company's ability to cover its interest expenses in recent periods.
It is important for investors and creditors to monitor the interest coverage ratio of a company as it reflects its financial health and ability to meet debt obligations. A consistent and healthy interest coverage ratio is essential for sustainable operations and growth.
Peer comparison
Dec 31, 2024