GATX Corporation (GATX)

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	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	434,100	397,600	401,000	364,300
Interest expense (ttm)	US$ in thousands	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	181,900	174,900	172,800	169,500
Interest coverage		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	2.39	2.27	2.32	2.15

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $581,300K ÷ $263,400K
= 2.21

The interest coverage ratio for GATX Corp. has remained relatively stable over the past eight quarters, ranging between 1.48 and 1.85. This ratio indicates the company's ability to meet its interest obligations from its operating profits. A higher interest coverage ratio demonstrates a stronger ability to cover interest expenses with operating earnings.

GATX Corp.'s interest coverage ratio has generally stayed above 1.5, indicating that the company has been able to cover its interest payments comfortably with its earnings. Despite some fluctuations, the consistency of the ratio above 1.5 suggests that the company has maintained a healthy financial position in terms of meeting its interest obligations. However, a ratio closer to 2 or higher would indicate even greater financial strength and lower risk of default.