Graco Inc (GGG)
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 | 613,993 | 641,109 | 619,452 | 606,108 | 575,621 | 552,281 | 532,521 | 518,725 | 518,680 | 518,776 | 518,501 | 429,507 | 385,931 | 356,912 | 333,359 | 399,318 | 418,987 | 409,650 | 420,863 | 418,748 |
| Interest expense (ttm) | US$ in thousands | 5,191 | 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 | 13,110 | 14,262 | 14,227 | 14,687 |
| Interest coverage | 118.28 | 109.07 | 102.75 | 101.75 | 58.16 | 48.81 | 43.39 | 39.68 | 50.78 | 51.73 | 49.42 | 38.27 | 34.21 | 31.77 | 28.04 | 33.11 | 31.96 | 28.72 | 29.58 | 28.51 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $613,993K ÷ $5,191K
= 118.28
The interest coverage ratio for Graco Inc has shown positive trends over the past five quarters, indicating the company's ability to meet its interest payment obligations comfortably. The ratio has been consistently above 1, indicating that Graco Inc generates sufficient operating income to cover its interest expenses.
The interest coverage ratio has significantly improved from 28.51 in Q2 2019 to 118.28 in Q4 2023, reflecting a strong financial position and improved profitability. This improvement signals that the company's earnings are significantly higher than its interest expenses, providing a cushion against potential financial challenges.
Graco Inc's interest coverage ratio peaked at 118.28 in Q4 2023, indicating a healthy financial position and improved capacity to service its debt obligations. This suggests that the company has sound financial management practices and is likely viewed positively by lenders and investors due to its ability to generate enough income to cover its interest payments multiple times over.
Overall, the consistent improvement in Graco Inc's interest coverage ratio reflects a positive financial performance and suggests that the company is effectively managing its debt and generating sufficient earnings to meet its interest obligations.
Peer comparison
Dec 31, 2023