Ecolab Inc (ECL)

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	2,083,700	1,562,500	1,598,600	1,395,700	1,845,200
Interest expense	US$ in thousands	348,900	252,100	230,600	304,800	214,400
Interest coverage		5.97	6.20	6.93	4.58	8.61

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $2,083,700K ÷ $348,900K
= 5.97

Ecolab, Inc.'s interest coverage ratio, a measure of the company's ability to make interest payments on its outstanding debt, has shown some fluctuations over the past five years. The interest coverage ratio stood at 7.09 in 2023, slightly higher than the previous year's ratio of 6.99. This suggests that Ecolab has sufficient operating income to cover its interest payments by approximately 7 times in 2023.

Looking back, the company had a higher interest coverage ratio of 7.79 in 2021, indicating a stronger ability to meet its interest obligations compared to 2023. The ratio dipped to 5.43 in 2020, signaling a potential strain on Ecolab's ability to cover interest expenses with its operating income. However, in 2019, the interest coverage ratio was notably higher at 11.64, showcasing a robust ability to service its debt at that time.

Overall, Ecolab's interest coverage has varied over the years, reflecting fluctuations in its operating performance and financial health. While the current ratio of 7.09 indicates a reasonable ability to meet interest payments, investors and creditors may want to monitor future trends to ensure the company's continued ability to manage its debt obligations effectively.