GATX Corporation (GATX)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	809,900	324,600	588,400	595,400	581,300	558,000	519,300	431,900	424,700	431,400	439,300	451,200	400,300	346,200	350,200	372,500	378,900	416,200	407,200	442,600
Interest expense (ttm)	US$ in thousands	341,000	322,100	301,300	282,200	263,400	248,100	233,600	221,800	214,000	207,300	203,500	201,600	204,000	202,200	201,000	198,400	190,300	186,700	182,800	180,900
Interest coverage		2.38	1.01	1.95	2.11	2.21	2.25	2.22	1.95	1.98	2.08	2.16	2.24	1.96	1.71	1.74	1.88	1.99	2.23	2.23	2.45

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $809,900K ÷ $341,000K
= 2.38

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt obligations.

For GATX Corporation, the interest coverage ratios over the past few quarters have shown some fluctuations. As of December 31, 2024, the interest coverage ratio was 2.38, indicating that GATX was generating 2.38 times the amount of earnings needed to cover its interest expenses.

The ratios have shown some variability over the period, with a peak of 2.45 on March 31, 2020, and a low of 1.01 on September 30, 2024. It is worth noting that a ratio of less than 1 would indicate that the company is not generating enough earnings to cover its interest expenses, which can be a concern for investors and creditors.

Overall, while there have been fluctuations, the interest coverage ratios for GATX Corporation have generally remained above 1, indicating that the company has been able to meet its interest obligations. Investors should continue to monitor these ratios to assess the company's ability to manage its debt and interest payments effectively.