Gates Industrial Corporation plc (GTES)
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 | 474,000 | 465,100 | 471,100 | 453,900 | 424,400 | 439,500 | 416,900 | 396,300 | 375,100 | 322,300 | 346,300 | 389,700 | 449,000 | 464,500 | 408,100 | 278,800 | 214,400 | 197,500 | 210,400 | 296,100 |
| Interest expense (ttm) | US$ in thousands | 138,900 | 143,200 | 147,600 | 159,900 | 163,200 | 165,300 | 159,100 | 147,600 | 139,400 | 131,600 | 131,400 | 131,700 | 133,500 | 145,800 | 151,000 | 152,000 | 154,300 | 152,600 | 151,500 | 156,400 |
| Interest coverage | 3.41 | 3.25 | 3.19 | 2.84 | 2.60 | 2.66 | 2.62 | 2.68 | 2.69 | 2.45 | 2.64 | 2.96 | 3.36 | 3.19 | 2.70 | 1.83 | 1.39 | 1.29 | 1.39 | 1.89 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $474,000K ÷ $138,900K
= 3.41
The interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing the company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates a healthier financial position, as it suggests the company is generating sufficient earnings to cover its interest obligations.
Based on the data provided for Gates Industrial Corporation plc, we can see fluctuations in the interest coverage ratio over the quarters from March 31, 2020, to December 31, 2024. The interest coverage ratio ranged from a low of 1.29 in September 30, 2020, to a high of 3.41 in December 31, 2024.
The trend in the interest coverage ratio shows some improvement over time, with fluctuations noted in certain quarters. Generally, an interest coverage ratio above 2 is considered to be acceptable, indicating that the company is generating enough earnings to cover its interest payments. Gates Industrial Corporation plc's interest coverage ratios mostly fall within this range, suggesting a reasonable ability to meet its interest obligations.
It is important to continue monitoring Gates Industrial Corporation plc's interest coverage ratio to ensure that it remains at a healthy level, as changes in the company's financial performance or market conditions could impact its ability to cover interest expenses effectively.
Peer comparison
Dec 31, 2024