BorgWarner Inc (BWA)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 546,000 | 1,160,000 | 1,374,000 | 1,151,000 | 618,000 |
| Interest expense | US$ in thousands | 99,000 | 90,000 | 96,000 | 117,000 | 8,000 |
| Interest coverage | 5.52 | 12.89 | 14.31 | 9.84 | 77.25 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $546,000K ÷ $99,000K
= 5.52
The interest coverage ratio for BorgWarner Inc has shown fluctuations over the past five years, as follows:
- As of December 31, 2020, the interest coverage ratio was robust at 77.25, indicating a strong ability to cover interest expenses with operating income.
- However, by December 31, 2021, the interest coverage ratio dropped significantly to 9.84, suggesting a potential strain on the company's ability to cover interest costs with its operational earnings.
- In the subsequent years, the ratio improved but remained below the initial level. By December 31, 2022, it stood at 14.31, showing some recovery.
- As of December 31, 2023, the interest coverage ratio was 12.89, indicating continued progress in managing interest payments relative to operating income.
- By the end of December 31, 2024, the interest coverage ratio decreased further to 5.52, signaling a potential increased burden in meeting interest obligations with current earnings.
Overall, the trend in BorgWarner Inc's interest coverage ratio suggests some volatility in its ability to cover interest expenses over the analyzed period, with notable fluctuations impacting the company's financial stability and leverage position.
Peer comparison
Dec 31, 2024