Hubbell Inc (HUBB)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,038,500	709,100	532,300	501,300	571,500
Interest expense	US$ in thousands	36,700	49,600	54,700	60,300	69,400
Interest coverage		28.30	14.30	9.73	8.31	8.23

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,038,500K ÷ $36,700K
= 28.30

Interest coverage is a key financial ratio that measures a company's ability to pay its interest expenses on outstanding debt. Hubbell Inc.'s interest coverage has shown a positive trend over the past five years. The interest coverage ratio has increased from 8.60 in 2019 to 28.30 in 2023, indicating a significant improvement in the company's ability to cover its interest obligations.

The increasing trend in interest coverage suggests that Hubbell Inc. has been generating sufficient operating income to comfortably cover its interest expenses. A higher interest coverage ratio is generally viewed positively by investors and creditors, as it signifies a lower risk of default on the company's debt obligations.

Overall, Hubbell Inc.'s strong interest coverage ratio reflects its financial health and ability to manage its debt effectively. However, while the trend is favorable, it is essential for investors to consider other factors alongside the interest coverage ratio to gain a comprehensive understanding of the company's financial performance and risk profile.