Howmet Aerospace Inc (HWM)
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 | 1,193,000 | 835,000 | 583,000 | 538,000 | 892,000 |
| Interest expense | US$ in thousands | 218,000 | 229,000 | 259,000 | 317,000 | 338,000 |
| Interest coverage | 5.47 | 3.65 | 2.25 | 1.70 | 2.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,193,000K ÷ $218,000K
= 5.47
The trend in Howmet Aerospace Inc's interest coverage ratio over the past five years indicates a generally positive development in the company's ability to cover its interest expenses with operating income. The interest coverage ratio has been steadily increasing from 2.15 in 2020 to 6.29 in 2023. This signifies a strengthening of the company's ability to meet its interest obligations, reflecting improved financial health and greater stability. A higher interest coverage ratio is typically seen as a positive indication of a company's financial strength and ability to service its debt obligations. This upward trend suggests that Howmet Aerospace Inc has been generating more operating income relative to its interest expenses, which can enhance its creditworthiness and financial flexibility.
Peer comparison
Dec 31, 2023