WW Grainger Inc (GWW)
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 | 2,565,000 | 2,552,000 | 2,488,000 | 2,361,000 | 2,215,000 | 2,088,000 | 1,923,000 | 1,723,000 | 1,547,000 | 1,405,000 | 1,347,000 | 1,218,000 | 1,019,000 | 925,000 | 877,000 | 1,048,000 | 1,252,000 | 1,358,000 | 1,208,000 | 1,168,000 |
| Interest expense (ttm) | US$ in thousands | 93,000 | 93,000 | 96,000 | 94,000 | 93,000 | 92,000 | 89,000 | 89,000 | 87,000 | 86,000 | 87,000 | 93,000 | 93,000 | 17,000 | 15,000 | 9,000 | 9,000 | 82,000 | 83,000 | 84,000 |
| Interest coverage | 27.58 | 27.44 | 25.92 | 25.12 | 23.82 | 22.70 | 21.61 | 19.36 | 17.78 | 16.34 | 15.48 | 13.10 | 10.96 | 54.41 | 58.47 | 116.44 | 139.11 | 16.56 | 14.55 | 13.90 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,565,000K ÷ $93,000K
= 27.58
W.W. Grainger Inc.'s interest coverage ratio has been consistently strong and improving over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
In the most recent quarter, Q4 2023, the interest coverage ratio reached 27.58, showing a robust ability to cover interest payments. This trend of improvement has been evident since Q1 2022, where the interest coverage ratio was at 19.36.
The continuous increase in the interest coverage ratio suggests that W.W. Grainger Inc. has been effectively managing its interest expenses and generating sufficient operating income to meet its financial obligations. Overall, the consistently high interest coverage ratio reflects a financially sound and stable position for the company.