ITT Inc (ITT)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 676,000 528,200 468,000 504,300 226,500
Interest expense US$ in thousands 36,600 10,400 6,400 1,100 109,100
Interest coverage 18.47 50.79 73.12 458.45 2.08

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $676,000K ÷ $36,600K
= 18.47

The interest coverage ratio for ITT Inc has shown significant fluctuations over the past five years. Starting at 2.08 in December 2020, the ratio skyrocketed to 458.45 by December 2021, indicating a substantial improvement in the company's ability to cover its interest expenses with operating income.

However, the ratio decreased to 73.12 by December 2022 and further dropped to 50.79 by December 2023. These declines suggest that ITT Inc's ability to cover its interest obligations decreased in those years, although the ratio remained relatively healthy compared to the starting point in 2020.

By December 2024, the interest coverage ratio had fallen to 18.47, signalling a significant decrease in the company's ability to cover its interest expenses with its operating income compared to the peak in 2021.

Overall, the fluctuations in ITT Inc's interest coverage ratio over the five-year period indicate varying levels of financial risk and the need for close monitoring of the company's ability to meet its interest payments from its operating earnings.