Fortune Brands Innovations Inc. (FBIN)
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 | 614,900 | 933,100 | 1,023,400 | 747,700 | 670,100 |
| Interest expense | US$ in thousands | 116,500 | 119,200 | 84,300 | 83,800 | 94,200 |
| Interest coverage | 5.28 | 7.83 | 12.14 | 8.92 | 7.11 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $614,900K ÷ $116,500K
= 5.28
Fortune Brands Innovations Inc.'s interest coverage has exhibited some fluctuations over the past five years. The interest coverage ratio, calculated as EBIT divided by interest expense, provides insight into the company's ability to meet its interest obligations. The decreasing trend in interest coverage from 2018 to 2020 may suggest a potential increase in the company's financial risk and vulnerability to changes in interest rates. However, there was a notable improvement in 2021, with a significant increase in the interest coverage ratio to 12.14, indicating a stronger ability to cover interest expenses with operating income. In the following years, while there was a slight decrease, the interest coverage remained adequate at above 5. A higher interest coverage ratio generally implies a lower financial risk for the company and a greater ability to service its debt obligations. Overall, Fortune Brands Innovations Inc. has maintained a satisfactory interest coverage ratio over the years, indicating a reasonable financial health and capacity to manage its interest expenses effectively.
Peer comparison
Dec 31, 2023