Gates Industrial Corporation plc (GTES)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 478,700 | 424,400 | 375,100 | 449,000 | 214,400 |
| Interest expense | US$ in thousands | 155,800 | 163,200 | 139,400 | 133,500 | 154,300 |
| Interest coverage | 3.07 | 2.60 | 2.69 | 3.36 | 1.39 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $478,700K ÷ $155,800K
= 3.07
Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio signifies that the company is more capable of covering its interest expenses.
The data provided shows that Gates Industrial Corporation plc's interest coverage ratio has fluctuated over the years, indicating changes in its ability to cover interest expenses. In December 31, 2020, the interest coverage ratio was relatively low at 1.39, suggesting that the company may have had difficulty meeting its interest payments that year.
However, the interest coverage ratio improved significantly in December 31, 2021 to 3.36, indicating a stronger ability to cover interest expenses. In the following years, the ratio continued to vary, with values of 2.69, 2.60, and 3.07 for December 31, 2022, 2023, and 2024 respectively.
Overall, the trend in the interest coverage ratio of Gates Industrial Corporation plc shows some volatility but indicates an improvement in the company's ability to meet its interest obligations, particularly in recent years. Investors and creditors may view this positively as it suggests a more stable financial position and lower risk of default due to insufficient interest coverage.
Peer comparison
Dec 31, 2024