WW Grainger Inc (GWW)
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 | 2,022,000 | 2,586,000 | 2,570,000 | 2,583,000 | 2,593,000 | 2,578,000 | 2,516,000 | 2,386,000 | 2,240,000 | 2,114,000 | 1,946,000 | 1,748,000 | 1,572,000 | 1,429,000 | 1,370,000 | 1,241,000 | 1,040,000 | 949,000 | 907,000 | 1,083,000 |
| Interest expense (ttm) | US$ in thousands | 77,000 | 83,000 | 86,000 | 90,000 | 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 | 91,000 | 89,000 | 83,000 |
| Interest coverage | 26.26 | 31.16 | 29.88 | 28.70 | 27.88 | 27.72 | 26.21 | 25.38 | 24.09 | 22.98 | 21.87 | 19.64 | 18.07 | 16.62 | 15.75 | 13.34 | 11.18 | 10.43 | 10.19 | 13.05 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,022,000K ÷ $77,000K
= 26.26
WW Grainger Inc's interest coverage ratio has shown a generally positive trend over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio, which indicates the company's ability to cover interest expenses with operating profits, improved from 13.05 on March 31, 2020, to 26.26 on December 31, 2024.
The trend suggests that WW Grainger Inc's operating profits have been consistently sufficient to cover its interest expenses, reflecting a strong financial position and a reduced risk of defaulting on debt obligations. The ratio peaked at 31.16 on September 30, 2024, indicating the company's particularly strong ability to meet its interest payments at that time.
Overall, the increasing trend in the interest coverage ratio demonstrates the company's improved financial health and ability to manage its debt effectively over the analyzed period, which may be viewed positively by investors and creditors.