Lear Corporation (LEA)

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	854,400	845,000	798,200	678,700	560,000	435,100	293,300	413,200	603,400	825,600	1,054,100	509,600	352,000	209,900	237,800	826,100	991,700	1,159,300	1,217,200	1,386,600
Interest expense (ttm)	US$ in thousands	101,100	100,100	99,200	97,900	98,600	99,200	97,000	94,400	91,800	88,700	92,600	97,500	99,600	100,700	98,200	95,500	92,000	90,700	87,900	84,300
Interest coverage		8.45	8.44	8.05	6.93	5.68	4.39	3.02	4.38	6.57	9.31	11.38	5.23	3.53	2.08	2.42	8.65	10.78	12.78	13.85	16.45

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $854,400K ÷ $101,100K
= 8.45

Interest coverage is a significant financial ratio that demonstrates a company's ability to meet its interest expenses with its earnings before interest and taxes (EBIT). Lear Corp.'s interest coverage ratio has been improving steadily over the past few quarters, indicating a positive trend in its ability to cover its interest obligations.

In Q4 2023, Lear Corp. had an interest coverage ratio of 9.72, a slight increase from the previous quarter's ratio of 9.47 in Q3 2023. This improvement suggests that Lear Corp.'s EBIT is sufficient to cover its interest expenses nearly ten times over, showcasing a healthy financial position.

Comparing Q4 2023 to the same quarter in the previous year, Lear Corp.'s interest coverage ratio has increased significantly from 6.97 to 9.72. This substantial improvement indicates that Lear Corp. has enhanced its ability to service its debt obligations with its earnings.

Overall, Lear Corp.'s interest coverage ratio has shown a consistent upward trajectory over the past few quarters, reflecting a strong financial performance and an improved capacity to meet its interest payments. This trend bodes well for the company's financial stability and indicates a positive outlook for potential lenders and investors.