Danaher Corporation (DHR)
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 | 3,570,000 | 4,907,000 | 5,313,000 | 5,604,000 | 6,132,000 | 7,055,000 | 7,613,000 | 8,379,000 | 8,689,000 | 8,652,000 | 8,506,000 | 8,297,000 | 8,262,000 | 7,653,000 | 7,097,000 | 5,925,000 | 4,495,000 | 3,900,900 | 3,385,500 | 3,384,400 |
| Interest expense (ttm) | US$ in thousands | 278,000 | 295,000 | 281,000 | 283,000 | 286,000 | 272,000 | 241,000 | 225,000 | 211,000 | 203,000 | 223,000 | 234,000 | 238,000 | 254,000 | 268,700 | 285,300 | 274,700 | 247,100 | 196,700 | 138,700 |
| Interest coverage | 12.84 | 16.63 | 18.91 | 19.80 | 21.44 | 25.94 | 31.59 | 37.24 | 41.18 | 42.62 | 38.14 | 35.46 | 34.71 | 30.13 | 26.41 | 20.77 | 16.36 | 15.79 | 17.21 | 24.40 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,570,000K ÷ $278,000K
= 12.84
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Analyzing Danaher Corporation's interest coverage ratio over the years, we observe a generally positive trend from March 31, 2020, to December 31, 2024. The ratio increased steadily from 24.40 in March 31, 2020, to its peak of 42.62 in September 30, 2022. This indicates the company's improving ability to cover its interest expenses with its operating income during this period.
However, after reaching the peak, the interest coverage ratio started to decline gradually. The ratio decreased to 12.84 by December 31, 2024. Although the ratio dropped significantly, it is important to note that it remained above 1, suggesting that Danaher Corporation still generated enough operating income to cover its interest expenses.
In conclusion, while the interest coverage ratio of Danaher Corporation experienced fluctuations over the analyzed period, it generally demonstrated a strong ability to meet its interest obligations through operating income. The recent decline in the ratio may warrant further monitoring to ensure the company can maintain its financial stability in the face of changing market conditions.
Peer comparison
Dec 31, 2024