ESAB Corp (ESAB)
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 | 435,295 | 395,436 | 353,039 | 319,088 | 224,547 |
| Interest expense | US$ in thousands | 64,890 | 85,074 | 37,950 | 39,811 | 42,007 |
| Interest coverage | 6.71 | 4.65 | 9.30 | 8.02 | 5.35 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $435,295K ÷ $64,890K
= 6.71
The interest coverage ratio for ESAB Corp has shown fluctuations over the past five years. Starting at 5.35 in 2020, the ratio improved to 8.02 in 2021, further increasing to 9.30 in 2022. However, in 2023, there was a significant decrease to 4.65, before rising again to 6.71 in 2024.
Overall, the company's interest coverage ratio indicates its ability to meet its interest obligations from its operating income. A higher ratio signifies a stronger ability to cover interest expenses with operating profit, indicating lower financial risk. ESAB Corp's interest coverage has shown some volatility, suggesting fluctuations in profitability or interest expense levels over the years. Monitoring this ratio going forward will be crucial to assess the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024