Masco Corporation (MAS)
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 | 1,292,000 | 1,240,000 | 898,000 | 1,637,000 | 1,324,000 |
| Interest expense | US$ in thousands | 106,000 | 108,000 | 278,000 | 144,000 | 159,000 |
| Interest coverage | 12.19 | 11.48 | 3.23 | 11.37 | 8.33 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,292,000K ÷ $106,000K
= 12.19
Masco Corp.'s interest coverage ratio has shown variability over the past five years. The interest coverage ratio indicates the company's ability to meet its interest payment obligations from its operating earnings. A higher ratio is generally favorable as it suggests a stronger ability to cover interest expenses.
In 2023, Masco Corp. reported an interest coverage ratio of 12.85, reflecting a significant improvement compared to the previous year. This indicates that the company generated ample operating earnings to cover its interest expenses.
In 2022, the interest coverage ratio was slightly lower at 12.19 compared to 2023 but still at a healthy level, indicating a continued ability to comfortably cover interest payments.
The interest coverage ratio decreased in 2021 to 5.26, potentially raising concerns about the company's ability to cover its interest expenses adequately. However, the ratio improved in 2022, indicating some recovery in this aspect.
In 2020, Masco Corp. reported an interest coverage ratio of 9.01, which suggests a solid ability to meet interest obligations from operating profits.
In 2019, the interest coverage ratio was 6.91, indicating that the company had sufficient earnings to cover its interest payments, although at a lower level compared to the more recent years.
Overall, Masco Corp.'s interest coverage has fluctuated over the years but has generally remained at healthy levels, indicating a reasonable ability to meet interest obligations from operating earnings. Investors and creditors may view this positively as it shows the company's capacity to handle its debt servicing requirements.
Peer comparison
Dec 31, 2023