Graco Inc (GGG)
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 | 439,652 | 493,230 | 503,223 | 498,899 | 530,735 | 632,480 | 614,554 | 606,108 | 575,621 | 552,281 | 532,521 | 518,725 | 518,680 | 519,030 | 518,188 | 462,103 | 418,527 | 391,509 | 368,523 | 401,573 |
| Interest expense (ttm) | US$ in thousands | 2,828 | 2,690 | 3,425 | 4,589 | 5,192 | 5,878 | 6,029 | 5,957 | 9,897 | 11,314 | 12,272 | 13,074 | 10,215 | 10,028 | 10,492 | 11,222 | 11,280 | 11,234 | 11,888 | 12,061 |
| Interest coverage | 155.46 | 183.36 | 146.93 | 108.72 | 102.22 | 107.60 | 101.93 | 101.75 | 58.16 | 48.81 | 43.39 | 39.68 | 50.78 | 51.76 | 49.39 | 41.18 | 37.10 | 34.85 | 31.00 | 33.30 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $439,652K ÷ $2,828K
= 155.46
Based on the provided data, the interest coverage ratio of Graco Inc has displayed a generally positive trend over the observed periods from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to cover its interest expenses with operating income.
Initially, in March 2020, Graco Inc had an interest coverage ratio of 33.30, indicating that the company's operating income was 33.30 times its interest expenses. This ratio improved steadily over the following periods, reaching its peak at 183.36 by September 30, 2024.
The significant increase in the interest coverage ratio from June to September 2024 suggests that the company's operating income was more than sufficient to cover its interest obligations, signaling financial stability and strength. However, there was a slight decrease in the ratio by the end of December 2024 to 155.46, which could indicate a change in the company's financial structure or profitability.
Overall, the upward trend in the interest coverage ratio of Graco Inc indicates an improving ability to meet interest payments, which is a positive indicator of the company's financial health and sustainability. It is essential for investors and stakeholders to continue monitoring this ratio to assess the company's ability to manage its debt and generate sustainable profits.
Peer comparison
Dec 31, 2024