Quaker Chemical Corporation (KWR)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 194,706 | 213,946 | 221,746 | 220,092 | 214,495 | 112,631 | 97,722 | 72,830 | 52,304 | 136,661 | 128,062 | 134,975 | 160,713 | 184,164 | 184,848 | 148,658 | 60,965 | 27,922 | -20,905 | -1,857 |
| Interest expense (ttm) | US$ in thousands | 43,224 | 43,422 | 45,246 | 48,105 | 50,699 | 53,103 | 49,970 | 41,715 | 32,585 | 28,429 | 23,743 | 22,422 | 23,513 | 18,849 | 21,215 | 23,541 | 26,603 | 31,109 | 30,517 | 24,661 |
| Interest coverage | 4.50 | 4.93 | 4.90 | 4.58 | 4.23 | 2.12 | 1.96 | 1.75 | 1.61 | 4.81 | 5.39 | 6.02 | 6.84 | 9.77 | 8.71 | 6.31 | 2.29 | 0.90 | -0.69 | -0.08 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $194,706K ÷ $43,224K
= 4.50
Quaker Chemical Corporation's interest coverage ratio has shown significant fluctuations over the period from March 2020 to December 2024. The interest coverage ratio measures a company's ability to meet its interest payments on its debt obligations. A ratio below 1 indicates that the company is not generating enough earnings to cover its interest expenses.
Looking at the data provided, it is evident that Quaker Chemical Corporation experienced challenges in covering its interest expenses in early periods, with negative figures reported in March 2020 and June 2020. However, the company's interest coverage improved gradually from September 2020 onwards, reaching a peak of 9.77 in September 2021, indicating a healthier ability to meet its interest obligations.
Subsequently, there was a slight decline in the interest coverage ratio, with figures ranging between 4.50 and 1.61 from December 2022 to December 2024. Although these ratios are still above 1, suggesting the company can cover its interest payments, the declining trend warrants attention as it may indicate a potential strain on the company's ability to service its debt in the future.
Overall, the fluctuations in Quaker Chemical Corporation's interest coverage ratio suggest varying levels of financial stability and capacity to service its debt obligations over the period under consideration. It is essential for stakeholders to monitor these ratios closely to ensure the company maintains a healthy financial position and liquidity.
Peer comparison
Dec 31, 2024