Flowserve Corporation (FLS)
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 | 272,267 | 191,297 | 180,972 | 248,022 | 369,301 |
| Interest expense | US$ in thousands | 66,924 | 46,247 | 57,617 | 56,185 | 54,980 |
| Interest coverage | 4.07 | 4.14 | 3.14 | 4.41 | 6.72 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $272,267K ÷ $66,924K
= 4.07
Flowserve Corp.'s interest coverage ratio has shown a fluctuating trend over the past five years. The ratio has ranged from a low of 4.66 in 2022 to a high of 8.72 in 2019, with the most recent figure standing at 5.57 in 2023.
A higher interest coverage ratio indicates that the company is better positioned to meet its interest obligations using its earnings before interest and taxes (EBIT). Flowserve's interest coverage ratio above 1 indicates that the company is generating sufficient operating income to cover its interest expenses.
The downward trend from 2019 to 2022 may suggest potential concerns regarding the company's ability to generate enough operating income to cover its interest expenses during those years. However, the ratio rebounded in 2023, indicating an improvement in the company's ability to cover its interest payments. It is important for investors and creditors to monitor this ratio over time to assess Flowserve's financial health and its capacity to service its debt obligations.
Peer comparison
Dec 31, 2023