Lincoln Electric Holdings Inc (LECO)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 636,935 | 737,999 | 622,078 | 594,084 | 329,854 |
| Interest expense | US$ in thousands | 42,786 | 44,371 | 29,500 | 22,214 | 21,973 |
| Interest coverage | 14.89 | 16.63 | 21.09 | 26.74 | 15.01 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $636,935K ÷ $42,786K
= 14.89
Interest coverage ratio is a financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally considered favorable as it suggests the company is generating sufficient earnings to meet its interest obligations.
Analyzing the interest coverage ratio of Lincoln Electric Holdings Inc over the past five years, we observe the following trend:
- December 31, 2020: Interest coverage ratio of 15.01
- December 31, 2021: Interest coverage ratio of 26.74
- December 31, 2022: Interest coverage ratio of 21.09
- December 31, 2023: Interest coverage ratio of 16.63
- December 31, 2024: Interest coverage ratio of 14.89
The interest coverage ratio of Lincoln Electric Holdings Inc has shown some fluctuations over the years. It peaked in 2021 at 26.74, indicating a strong ability to cover interest expenses. However, in the following years, the ratio decreased but remained above 10, reflecting continued operational ability to fulfill interest payments.
Overall, the company's interest coverage ratio demonstrates a generally healthy financial position, with the ability to comfortably meet its interest obligations from operating income. However, it is essential for investors and stakeholders to monitor this ratio for any significant changes in the company's financial health.
Peer comparison
Dec 31, 2024