Carrier Global Corp (CARR)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,728,000 | 5,561,000 | 5,443,000 | 2,241,000 | 2,296,000 | 2,122,000 | 3,003,000 | 3,333,000 | 4,515,000 | 4,545,000 | 3,847,000 | 3,811,000 | 2,645,000 | 3,427,000 | 3,680,000 | 3,339,000 | 3,083,000 |
| Interest expense (ttm) | US$ in thousands | 614,000 | 607,000 | 562,000 | 471,000 | 337,000 | 302,000 | 287,000 | 261,000 | 302,000 | 298,000 | 303,000 | 310,000 | 319,000 | 332,000 | 346,000 | 356,000 | 291,000 |
| Interest coverage | 9.33 | 9.16 | 9.69 | 4.76 | 6.81 | 7.03 | 10.46 | 12.77 | 14.95 | 15.25 | 12.70 | 12.29 | 8.29 | 10.32 | 10.64 | 9.38 | 10.59 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,728,000K ÷ $614,000K
= 9.33
Based on the data provided for Carrier Global Corp's interest coverage ratio, we can observe the following trends:
1. The interest coverage ratio measures the company's ability to meet its interest payments on debt with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
2. From December 31, 2020, until September 30, 2022, Carrier Global Corp exhibited a consistent and healthy interest coverage ratio above 10, ranging from 9.38 to 15.25. This indicates that the company had more than enough operating income to cover its interest expenses during this period.
3. However, there was a slight dip in the interest coverage ratio by the end of 2022, where it dropped to 6.81 on December 31, 2023, and further down to 4.76 on March 31, 2024. These lower ratios suggest a potential strain on the company's ability to cover its interest payments with its operating income during these periods.
4. The interest coverage ratio showed some improvement in the following quarters, reaching 9.69 on June 30, 2024, and maintaining levels around 9-10 by the end of 2024.
5. Overall, while the company experienced fluctuations in its interest coverage ratio over the analyzed period, it is essential for investors and analysts to monitor these changes closely to assess the company's financial health and its ability to fulfill its debt obligations. It is advisable for the company to aim for a sustainable interest coverage ratio above 1 to ensure financial stability and creditor confidence.
Peer comparison
Dec 31, 2024