Lennox International Inc (LII)
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 | 1,032,500 | 789,200 | 654,500 | 585,100 | 472,700 |
| Interest expense | US$ in thousands | 38,700 | 51,700 | 38,700 | 25,000 | 28,300 |
| Interest coverage | 26.68 | 15.26 | 16.91 | 23.40 | 16.70 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,032,500K ÷ $38,700K
= 26.68
Lennox International Inc's interest coverage ratio has shown a strong upward trend over the past five years. The ratio stood at 16.70 on December 31, 2020, indicating that the company was generating enough operating income to cover its interest expenses almost 17 times. This ratio improved significantly to 23.40 by the end of 2021, reflecting a more robust ability to meet interest payment obligations.
Although there was a slight decline in the interest coverage ratio in 2022 to 16.91, it remained at a relatively healthy level, suggesting that Lennox International Inc could still comfortably cover its interest expenses. However, there was a further decrease in the ratio to 15.26 by the end of 2023, indicating a slight weakening in the company's ability to handle its interest obligations.
The most recent data point, with an interest coverage ratio of 26.68 as of December 31, 2024, shows a significant improvement from the previous year and suggests that Lennox International Inc has once again strengthened its capacity to pay interest charges. Overall, the trend in the interest coverage ratio for Lennox International Inc indicates that the company has generally been able to manage its interest expenses effectively, with occasional fluctuations in its ability to cover these obligations.
Peer comparison
Dec 31, 2024