Quaker Chemical Corporation (KWR)
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 | 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 | 50,682 | 48,066 | 85,729 | 88,571 |
| Interest expense (ttm) | US$ in thousands | 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 | 16,976 | 8,287 | 3,244 | 3,563 |
| Interest coverage | 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 | 2.99 | 5.80 | 26.43 | 24.86 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $214,495K ÷ $50,699K
= 4.23
Quaker Houghton's interest coverage has been consistently strong over the past eight quarters, as indicated by the values ranging from 4.49 to 7.35. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
The gradual decline in the interest coverage ratio from Q1 2022 to Q3 2023 may reflect increased interest expenses relative to EBIT during this period. However, it's worth noting that even at its lowest point in Q3 2023, the interest coverage ratio of 4.49 still indicates that Quaker Houghton's earnings are more than sufficient to cover its interest expenses.
Overall, with interest coverage consistently well above 1 (indicating the ability to cover interest payments), Quaker Houghton appears to have a stable financial position with a healthy capacity to meet its interest obligations. This suggests that the company is not overly burdened by its interest expenses and has sufficient earnings to manage its debt servicing requirements effectively.
Peer comparison
Dec 31, 2023