Illinois Tool Works Inc (ITW)
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 | 4,705,000 | 4,040,000 | 3,790,000 | 3,477,000 | 2,882,000 |
| Interest expense | US$ in thousands | 283,000 | 266,000 | 203,000 | 202,000 | 206,000 |
| Interest coverage | 16.63 | 15.19 | 18.67 | 17.21 | 13.99 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,705,000K ÷ $283,000K
= 16.63
Illinois Tool Works Inc's interest coverage has shown a positive trend over the last five years. The interest coverage ratio has increased steadily from 13.99 in December 31, 2020, to 16.63 by December 31, 2024. This indicates the company's ability to cover its interest expenses with its earnings has improved over time. The consistent upward trend in interest coverage reflects a stronger financial position and lower financial risk for Illinois Tool Works Inc. An interest coverage ratio above 1 suggests that the company is generating enough operating income to comfortably meet its interest obligations, and a ratio above 10 is generally considered healthy. Overall, the increasing trend in Illinois Tool Works Inc's interest coverage ratio signifies improved financial health and a better ability to manage debt obligations.
Peer comparison
Dec 31, 2024