Honeywell International Inc (HON)

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	7,895,000	8,150,000	8,202,000	8,316,000	8,337,000	7,580,000	7,479,000	7,061,000	6,697,000	7,237,000	7,114,000	7,374,000	7,737,000	7,669,000	6,969,000	6,311,000	6,356,000	6,410,000	7,181,000	7,898,000
Interest expense (ttm)	US$ in thousands	1,058,000	969,000	878,000	815,000	765,000	707,000	599,000	499,000	414,000	350,000	342,000	338,000	343,000	358,000	369,000	376,000	359,000	355,000	350,000	345,000
Interest coverage		7.46	8.41	9.34	10.20	10.90	10.72	12.49	14.15	16.18	20.68	20.80	21.82	22.56	21.42	18.89	16.78	17.70	18.06	20.52	22.89

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $7,895,000K ÷ $1,058,000K
= 7.46

Honeywell International Inc's interest coverage ratio has exhibited a declining trend over the past few years, indicating a potential deterioration in the company's ability to cover its interest expenses with its operating income. From March 31, 2020, where the interest coverage ratio was 22.89, the ratio decreased to 7.46 by December 31, 2024. This decline suggests that the company may be facing challenges in generating enough earnings to meet its interest payment obligations.

A higher interest coverage ratio is generally preferred as it signifies that the company has sufficient earnings to comfortably cover its interest expenses. Conversely, a lower interest coverage ratio raises concerns about the company's financial health and its ability to service its debt. In Honeywell International Inc's case, the decreasing trend in the interest coverage ratio indicates a potential strain on its financial resources and warrants further attention and analysis to assess the company's debt repayment capacity and overall financial stability.