Lincoln Electric Holdings Inc (LECO)
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 | 737,999 | 623,934 | 348,665 | 287,970 | 394,461 |
| Interest expense | US$ in thousands | 51,133 | 31,107 | 23,781 | 23,959 | 25,942 |
| Interest coverage | 14.43 | 20.06 | 14.66 | 12.02 | 15.21 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $737,999K ÷ $51,133K
= 14.43
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments. Looking at the historical trend of Lincoln Electric Holdings, Inc.'s interest coverage ratio, we observe the following:
- In 2023, the interest coverage ratio was 15.94, which indicates that the company earned 15.94 times the amount of interest expense it had to pay for the year. This suggests a strong ability to cover its interest obligations.
- In 2022, the interest coverage ratio was 21.16, showing a further increase from the previous year and indicating an even stronger ability to cover interest expenses.
- In 2021, the interest coverage ratio was 21.23, maintaining a high level of coverage similar to the previous year.
- In 2020, the interest coverage ratio was 14.91, which, although lower than the previous year, still indicates a relatively healthy ability to cover interest payments.
- In 2019, the interest coverage ratio was 16.49, showing a slight decrease from the previous year but still demonstrating a robust ability to meet interest obligations.
Overall, Lincoln Electric Holdings, Inc. has maintained a consistently strong interest coverage ratio over the past five years, indicating a solid financial position with the ability to comfortably cover its interest expenses.
Peer comparison
Dec 31, 2023