Mohawk Industries Inc (MHK)
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 | 694,500 | -287,808 | 235,831 | 1,347,240 | 636,753 |
| Interest expense | US$ in thousands | 48,500 | 77,514 | 51,938 | 57,252 | 52,379 |
| Interest coverage | 14.32 | -3.71 | 4.54 | 23.53 | 12.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $694,500K ÷ $48,500K
= 14.32
The interest coverage ratio for Mohawk Industries Inc has shown an inconsistent trend over the years. In 2020, the ratio stood at a solid 12.16, indicating that the company was comfortably able to cover its interest expenses with its operating income. The ratio improved significantly in 2021 to 23.53, signaling even greater strength in meeting interest obligations.
However, there was a notable decline in 2022, where the interest coverage ratio fell to 4.54. This decrease suggests that the company's ability to cover its interest expenses weakened during that period. Furthermore, in 2023, the interest coverage ratio turned negative, standing at -3.71. A negative ratio indicates that the company's operating income was not sufficient to cover its interest payments, which raises concerns about the company's financial health and ability to meet its debt obligations.
Fortunately, the company's interest coverage ratio rebounded in 2024 to 14.32, demonstrating a significant improvement in its ability to cover interest expenses compared to the previous year. Overall, while there have been fluctuations in Mohawk Industries Inc's interest coverage ratio in recent years, it is crucial for investors and stakeholders to closely monitor this metric to assess the company's financial stability and debt repayment capacity.
Peer comparison
Dec 31, 2024