Graco Inc (GGG)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 613,993 | 575,621 | 518,680 | 385,931 | 418,987 |
| Interest expense | US$ in thousands | 5,191 | 9,897 | 10,215 | 11,280 | 13,110 |
| Interest coverage | 118.28 | 58.16 | 50.78 | 34.21 | 31.96 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $613,993K ÷ $5,191K
= 118.28
Graco Inc's interest coverage ratio has shown a generally increasing trend over the past five years, indicating that the company's ability to meet its interest obligations from its earnings has been improving. The interest coverage ratio increased from 31.96 in 2019 to 118.28 in 2023, reflecting a significant enhancement in the company's ability to cover its interest expenses with operating profits. This improvement suggests that Graco Inc has become more financially stable and less risky in terms of its debt repayment obligations. It is essential to note that a higher interest coverage ratio signifies a stronger financial position and lower default risk, which can be favorable for the company's creditworthiness in the eyes of creditors and investors.
Peer comparison
Dec 31, 2023