Jacobs Solutions Inc. (J)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,002,923 | 1,030,067 | 1,061,464 | 1,080,875 | 961,667 | 905,189 | 859,446 | 841,589 | 643,500 | 688,091 | 459,048 | 389,678 | 598,568 | 535,973 | 612,585 | 508,163 | 443,066 | 404,851 | 565,709 | 692,477 |
| Interest expense (ttm) | US$ in thousands | 171,383 | 168,108 | 157,172 | 139,514 | 120,896 | 100,245 | 87,476 | 81,358 | 74,827 | 72,714 | 66,831 | 65,013 | 64,703 | 62,207 | 58,304 | 59,089 | 73,358 | 83,866 | 100,379 | 105,189 |
| Interest coverage | 5.85 | 6.13 | 6.75 | 7.75 | 7.95 | 9.03 | 9.82 | 10.34 | 8.60 | 9.46 | 6.87 | 5.99 | 9.25 | 8.62 | 10.51 | 8.60 | 6.04 | 4.83 | 5.64 | 6.58 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,002,923K ÷ $171,383K
= 5.85
The interest coverage ratio reflects Jacobs Solutions Inc.'s ability to meet its interest obligations with its operating profits. Over the past five years, from 2019 to 2023, the interest coverage ratio has shown some fluctuations.
The interest coverage ratio has generally been healthy, consistently above 5 during this period. It peaked at 10.51 in March 2020, indicating that the company's earnings were more than sufficient to cover its interest expenses at that time.
However, there have been some periods where the interest coverage ratio dipped below 6, such as in March 2021 and March 2019. This could indicate potential challenges in meeting interest payments with operating profits during those specific quarters.
Overall, the trend in the interest coverage ratio for Jacobs Solutions Inc. demonstrates a reasonable ability to meet its interest obligations with operating profits, although management should closely monitor and potentially address any periods of lower coverage ratios to ensure financial stability.
Peer comparison
Dec 31, 2023