Quaker Chemical Corporation (KWR)
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 | 219,032 | 41,573 | 178,634 | 60,965 | 50,682 |
| Interest expense | US$ in thousands | 50,699 | 32,579 | 22,326 | 26,603 | 16,976 |
| Interest coverage | 4.32 | 1.28 | 8.00 | 2.29 | 2.99 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $219,032K ÷ $50,699K
= 4.32
Quaker Houghton's interest coverage has shown some variability over the past five years. The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher interest coverage ratio indicates a greater ability to cover interest expenses.
In 2023, the interest coverage ratio was 4.68, slightly lower than the previous year's ratio of 4.89. This may indicate a slight decrease in Quaker Houghton's ability to cover its interest expenses with its operating income.
Comparing to 2021, where the interest coverage ratio was 8.29, the ratios for 2022 and 2023 suggest a notable decline in the company's ability to cover interest expenses during these two years. However, it's worth noting that the ratios for 2020 and 2019 were 5.26 and 6.68 respectively, which were lower than 2021 but higher than 2022 and 2023.
Overall, Quaker Houghton's interest coverage has seen some fluctuations in recent years, and it would be advisable for stakeholders to monitor this ratio closely to ensure the company's continued ability to meet its debt obligations.
Peer comparison
Dec 31, 2023