Federal Signal Corporation (FSS)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	222,700	206,300	183,500	171,700	161,200	135,200	130,400	122,700	122,100	136,600	136,100	126,600	130,400	131,900	136,200	153,300	146,600	143,800	135,800	127,100
Interest expense (ttm)	US$ in thousands	19,700	19,800	17,400	13,700	10,300	7,100	5,500	4,700	4,500	4,500	4,600	5,300	5,700	6,300	7,200	7,400	7,900	8,200	8,300	8,800
Interest coverage		11.30	10.42	10.55	12.53	15.65	19.04	23.71	26.11	27.13	30.36	29.59	23.89	22.88	20.94	18.92	20.72	18.56	17.54	16.36	14.44

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $222,700K ÷ $19,700K
= 11.30

The interest coverage ratio for Federal Signal Corp. has shown a declining trend over the past eight quarters. In Q4 2023, the interest coverage ratio stood at 11.42, indicating that the company earned 11.42 times the amount needed to cover its interest expenses. This represents a decrease from the peak in Q1 2022 when the interest coverage ratio was 27.53.

The downward trend in the interest coverage ratio may raise concerns about the company's ability to meet its interest obligations. A lower interest coverage ratio suggests that the company may have a higher risk of defaulting on its debt payments. It is essential for investors and stakeholders to closely monitor the company's financial health and assess its ability to generate sufficient earnings to cover its interest expenses in the future.