Gates Industrial Corporation plc (GTES)
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 | 424,400 | 375,100 | 449,000 | 214,400 | 352,000 |
| Interest expense | US$ in thousands | 163,200 | 139,400 | 133,500 | 154,300 | 157,800 |
| Interest coverage | 2.60 | 2.69 | 3.36 | 1.39 | 2.23 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $424,400K ÷ $163,200K
= 2.60
The interest coverage ratio for Gates Industrial Corporation plc has fluctuated over the past five years, ranging from a low of 1.39 in 2020 to a high of 3.36 in 2021. The ratio indicates the company's ability to meet its interest obligations from its operating income.
A higher interest coverage ratio suggests that the company is more capable of servicing its debt obligations using its earnings. In this case, Gates Industrial Corporation plc demonstrated a stronger ability to cover its interest payments in 2021 compared to the other years analyzed.
However, the ratios for 2020 and 2019 show a lower interest coverage, indicating that the company may have had challenges meeting its interest payments relative to its operating income during those years.
Overall, the trend in interest coverage ratios for Gates Industrial Corporation plc suggests some variability in its ability to cover interest expenses with operating income, which may warrant further investigation into the company's financial health and debt management strategies.
Peer comparison
Dec 31, 2023