Lennox International Inc (LII)
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 | 789,200 | 654,500 | 585,100 | 472,700 | 555,300 |
| Interest expense | US$ in thousands | 51,700 | 38,700 | 25,000 | 28,300 | 47,500 |
| Interest coverage | 15.26 | 16.91 | 23.40 | 16.70 | 11.69 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $789,200K ÷ $51,700K
= 15.26
The interest coverage ratio for Lennox International Inc has shown a consistent and strong performance over the past five years. The ratio has ranged from 10.68 to 24.05, indicating that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses.
A higher interest coverage ratio reflects the company's ability to meet its interest obligations comfortably. Lennox International Inc's interest coverage ratio has been well above 1 in all the years reported, signaling that the company has generated ample earnings to cover its interest payments by a substantial margin.
The increasing trend in the interest coverage ratio from 2019 to 2021 demonstrates improving financial health and stability. This indicates that Lennox International Inc has been effectively managing its debt and interest obligations, which is a positive sign for investors and creditors.
Overall, the consistently high and improving interest coverage ratio for Lennox International Inc suggests a strong financial position and the ability to service its debt obligations effectively.
Peer comparison
Dec 31, 2023