Kadant Inc (KAI)
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 | 171,252 | 166,677 | 171,312 | 116,035 | 80,567 |
| Interest expense | US$ in thousands | 20,028 | 8,398 | 6,478 | 4,821 | 7,423 |
| Interest coverage | 8.55 | 19.85 | 26.45 | 24.07 | 10.85 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $171,252K ÷ $20,028K
= 8.55
The interest coverage ratio for Kadant Inc has shown a consistently strong performance over the years, indicating the company's ability to meet its interest payment obligations comfortably.
As of December 31, 2020, the interest coverage ratio stood at 10.85, signaling that Kadant Inc generated earnings that were 10.85 times higher than its interest expenses. This ratio increased significantly to 24.07 by December 31, 2021, further bolstering the company's financial health.
The trend continued with the interest coverage ratio reaching 26.45 by December 31, 2022, showcasing the company's robust capacity to handle its interest payments. Although there was a slight decline to 19.85 by December 31, 2023, the ratio remained at a healthy level, indicating Kadant Inc's continued ability to service its debt obligations comfortably.
However, there was a notable decrease in the interest coverage ratio to 8.55 by December 31, 2024, suggesting a potential increase in financial risk as the company's earnings may not be covering its interest expenses as efficiently as in previous years. It would be important for Kadant Inc to monitor this ratio closely and take appropriate measures to maintain a healthy balance between earnings and interest obligations.
Peer comparison
Dec 31, 2024