Knowles Cor (KN)
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 | 51,100 | -414,800 | 115,800 | 29,200 | 81,200 |
| Interest expense | US$ in thousands | 7,600 | 4,600 | 14,800 | 17,600 | 15,500 |
| Interest coverage | 6.72 | -90.17 | 7.82 | 1.66 | 5.24 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $51,100K ÷ $7,600K
= 6.72
Knowles Corp's interest coverage ratio has fluctuated over the past five years, ranging from a low of 2.99 in 2020 to a high of 25.10 in 2022. The interest coverage ratio measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher ratio indicates that the company is more capable of servicing its debt obligations.
In 2023, the interest coverage ratio decreased to 8.02 from the peak of 25.10 in 2022 but remained at a relatively healthy level compared to the previous years. This suggests that Knowles Corp's earnings are still sufficient to cover its interest expenses comfortably. However, a declining trend in the interest coverage ratio may signal potential financial distress if not managed effectively.
Overall, Knowles Corp's interest coverage ratio performance indicates a certain level of stability in managing its debt obligations, but continued monitoring of this metric is recommended to ensure the company's financial health and sustainability.
Peer comparison
Dec 31, 2023