Lennox International Inc (LII)
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 | 1,032,500 | 973,000 | 856,600 | 815,800 | 789,100 | 736,500 | 735,200 | 682,500 | 654,400 | 618,800 | 595,000 | 584,100 | 585,300 | 625,900 | 630,300 | 549,500 | 472,700 | 488,200 | 478,700 | 497,000 |
| Interest expense (ttm) | US$ in thousands | 38,700 | 44,500 | 46,800 | 49,300 | 51,700 | 53,000 | 52,300 | 46,000 | 38,600 | 32,200 | 28,200 | 25,900 | 25,100 | 25,000 | 25,000 | 25,500 | 28,200 | 33,100 | 39,100 | 45,300 |
| Interest coverage | 26.68 | 21.87 | 18.30 | 16.55 | 15.26 | 13.90 | 14.06 | 14.84 | 16.95 | 19.22 | 21.10 | 22.55 | 23.32 | 25.04 | 25.21 | 21.55 | 16.76 | 14.75 | 12.24 | 10.97 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,032,500K ÷ $38,700K
= 26.68
The interest coverage ratio for Lennox International Inc has shown a consistent upward trend from March 31, 2020, to December 31, 2024. The ratio started at 10.97 in March 2020 and steadily increased to a peak of 26.68 by December 31, 2024. This indicates that the company's ability to cover its interest expenses improved over this period.
A higher interest coverage ratio suggests that Lennox International Inc has sufficient earnings to cover its interest payments comfortably. This is a positive sign for investors and creditors as it indicates that the company is less risky in terms of its ability to meet its debt obligations.
However, it is worth noting that there was a slight decrease in the interest coverage ratio from March 31, 2024, to September 30, 2024. This may warrant further examination to understand the factors contributing to this change and whether it signals a potential concern for the company's financial health. Overall, the increasing trend in the interest coverage ratio reflects positively on Lennox International Inc's ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2024