Leggett & Platt Incorporated (LEG)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -424,100 | -836,800 | -822,100 | -113,400 | -92,900 | 362,100 | 382,900 | 429,200 | 482,500 | 544,300 | 574,800 | 603,100 | 592,700 | 592,000 | 599,000 | 451,200 | 403,200 | 199,000 | 193,900 | 308,800 |
| Interest expense (ttm) | US$ in thousands | 84,900 | 83,500 | 84,000 | 83,600 | 84,100 | 86,800 | 86,000 | 84,000 | 81,400 | 77,600 | 76,300 | 75,000 | 73,900 | 74,300 | 76,300 | 78,000 | 79,600 | 81,100 | 81,800 | 83,300 |
| Interest coverage | -5.00 | -10.02 | -9.79 | -1.36 | -1.10 | 4.17 | 4.45 | 5.11 | 5.93 | 7.01 | 7.53 | 8.04 | 8.02 | 7.97 | 7.85 | 5.78 | 5.07 | 2.45 | 2.37 | 3.71 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-424,100K ÷ $84,900K
= -5.00
Based on the provided data, Leggett & Platt Incorporated's interest coverage ratio has fluctuated over the periods from March 31, 2020, to December 31, 2024.
The interest coverage ratio, also known as times interest earned, indicates the company's ability to cover its interest expenses with its operating income. A higher ratio suggests that the company is more capable of meeting its interest obligations.
Leggett & Platt's interest coverage ratio improved significantly from March 31, 2020 (3.71) to a peak of 8.04 on March 31, 2022. This increase was likely driven by higher operating income relative to interest expenses during this period.
However, the interest coverage ratio started declining after March 31, 2022, reaching below 5 by December 31, 2022, and continuing to decrease in subsequent periods. The ratios turned negative from December 31, 2023, indicating that the company's operating income was insufficient to cover its interest expenses.
The negative interest coverage ratios from December 31, 2023, to December 31, 2024, raise concerns about Leggett & Platt's ability to meet its interest obligations with its current level of operating income.
It is important for investors and stakeholders to monitor the trend of Leggett & Platt's interest coverage ratio closely, as sustained low or negative ratios could indicate financial distress or liquidity issues for the company in servicing its debt obligations.
Peer comparison
Dec 31, 2024