Brinks Company (BCO)

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 385,400 424,800 456,600 517,778 570,336 630,881 704,854 686,390 648,872 608,956 603,529 572,459 559,964 537,580 533,281 448,686 403,094 346,703 310,211 354,321
Interest expense (ttm) US$ in thousands 235,700 238,500 229,300 223,900 214,400 195,300 176,200 157,500 138,800 124,200 117,100 112,900 112,200 109,200 108,700 103,700 96,500 93,400 89,200 88,700
Interest coverage 1.64 1.78 1.99 2.31 2.66 3.23 4.00 4.36 4.67 4.90 5.15 5.07 4.99 4.92 4.91 4.33 4.18 3.71 3.48 3.99

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $385,400K ÷ $235,700K
= 1.64

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates stronger ability to meet interest obligations.

Based on the data provided for Brinks Company, there has been a gradual decline in the interest coverage ratio from 3.99 on March 31, 2020, to a low of 1.64 on December 31, 2024. This downward trend suggests that the company may be experiencing challenges in generating sufficient operating income to cover its interest expenses.

The peak interest coverage ratio of 5.15 on June 30, 2022, indicates a period of stronger financial health for Brinks Company. However, the subsequent decline in the ratio raises concerns about the company's ability to service its debt obligations. The decreasing trend in the interest coverage ratio may indicate increasing financial risk for the company, potentially leading to difficulties in meeting interest payments in the future.

It is important for investors and stakeholders to monitor the interest coverage ratio closely as a declining trend could signal financial distress and potentially impact the company's creditworthiness and overall financial stability. Management may need to implement strategies to improve profitability and enhance the company's ability to cover its interest expenses effectively.