ITT Inc (ITT)
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 | 528,200 | 468,000 | 504,300 | 226,500 | 411,400 |
| Interest expense | US$ in thousands | 10,400 | 6,400 | -1,100 | 109,100 | 3,000 |
| Interest coverage | 50.79 | 73.12 | — | 2.08 | 137.13 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $528,200K ÷ $10,400K
= 50.79
Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Based on the data provided for ITT Inc, we can see a consistent and strong upward trend in the interest coverage ratio over the past few years. In 2021, the interest coverage ratio was not available, but in 2022 and 2023, the ratios were 71.45 and 50.78 respectively.
This indicates that ITT Inc has been able to generate significantly more earnings relative to its interest expenses in recent years. It suggests a robust financial position and a lower risk of default on debt obligations related to interest payments.
Overall, the trend in the interest coverage ratio for ITT Inc reflects a healthy financial performance and signals a strong ability to cover interest costs efficiently.
Peer comparison
Dec 31, 2023