GATX Corporation (GATX)

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	685,200	581,300	424,700	400,300	378,900
Interest expense	US$ in thousands	341,000	263,400	214,000	204,000	190,300
Interest coverage		2.01	2.21	1.98	1.96	1.99

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $685,200K ÷ $341,000K
= 2.01

The interest coverage ratio for GATX Corporation has been relatively stable over the past five years, ranging from 1.96 to 2.21. This ratio indicates the company's ability to meet its interest obligations from its operating income.

Although the ratio has shown some fluctuation, generally hovering around the 2x mark, it suggests that GATX Corporation is able to cover its interest expenses with its earnings. A ratio below 1 would indicate that the company is not generating enough operating income to cover its interest expenses, which could be a cause for concern for creditors and investors.

Overall, the trend in GATX Corporation's interest coverage ratio demonstrates a moderate level of financial health in terms of its ability to manage its interest obligations. However, it would be important for the company to continue monitoring and maintaining this ratio to ensure its long-term financial stability.