Barnes Group Inc (B)
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 | 91,464 | 52,785 | 144,026 | 117,439 | 227,444 |
| Interest expense | US$ in thousands | 58,200 | 14,600 | 16,209 | 15,944 | 20,600 |
| Interest coverage | 1.57 | 3.62 | 8.89 | 7.37 | 11.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $91,464K ÷ $58,200K
= 1.57
The interest coverage ratio of Barnes Group Inc. has demonstrated some fluctuations over the past five years. In 2023, the interest coverage ratio decreased to 1.53 from higher values in the previous years, indicating a potential decrease in the company's ability to cover its interest expenses with its operating income. The significant drop in interest coverage from 2022 to 2023 may raise concerns about the company's ability to service its debt obligations.
In general, a higher interest coverage ratio is preferred as it signifies a company's strong ability to meet its interest payments from its operating profits. However, a declining trend in the interest coverage ratio, as observed in this case, could indicate a deteriorating financial condition or higher leverage levels. It is essential for stakeholders to closely monitor the trend in the interest coverage ratio to assess the company's financial health and ability to manage its debt effectively.
Peer comparison
Dec 31, 2023