Lear Corporation (LEA)
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 | 854,400 | 560,000 | 603,400 | 352,000 | 991,700 |
| Interest expense | US$ in thousands | 101,100 | 98,600 | 91,800 | 99,600 | 92,000 |
| Interest coverage | 8.45 | 5.68 | 6.57 | 3.53 | 10.78 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $854,400K ÷ $101,100K
= 8.45
Interest coverage measures a company's ability to meet its interest obligations with its operating income. Lear Corp.'s interest coverage has fluctuated over the past five years, ranging from 4.85 to 11.88. The trend shows an increase in 2023 compared to the previous year, indicating that the company's ability to cover interest payments improved. A higher interest coverage ratio suggests that Lear Corp. is in a better position to fulfill its debt obligations from its operating profits. Overall, the company has maintained relatively healthy interest coverage levels over the years, which could indicate a solid financial position regarding its debt repayment capacity.
Peer comparison
Dec 31, 2023