Fortive Corp (FTV)

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	1,133,700	1,113,700	1,074,500	1,015,500	987,400	898,100	848,500	827,500	812,800	795,100	730,300	621,600	539,400	495,400	454,300	447,300	443,900	598,500	783,700	1,012,500
Interest expense (ttm)	US$ in thousands	123,500	127,100	123,700	111,600	98,300	91,400	90,100	94,300	103,200	114,800	126,600	137,600	148,500	137,600	147,700	155,900	142,600	123,600	99,700	79,200
Interest coverage		9.18	8.76	8.69	9.10	10.04	9.83	9.42	8.78	7.88	6.93	5.77	4.52	3.63	3.60	3.08	2.87	3.11	4.84	7.86	12.78

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,133,700K ÷ $123,500K
= 9.18

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio is generally more favorable as it suggests that the company is more capable of servicing its debt.

Analyzing Fortive Corp's interest coverage ratio over the past eight quarters, we observe that the ratio has remained relatively stable, ranging from 8.70 to 10.23. This indicates that Fortive has consistently generated sufficient earnings to cover its interest expenses during this period.

The highest interest coverage ratio of 10.23 was recorded in Q4 2022, suggesting a strong ability to service debt obligations. However, there was a slight decline in subsequent quarters, with the ratio ranging between 8.70 and 9.26. Despite these fluctuations, the ratios generally remain above 8.0, indicating a comfortable margin of safety in meeting interest payments.

Overall, Fortive Corp's interest coverage ratio demonstrates a solid financial position and indicates a healthy ability to repay interest on its debt obligations.