Mohawk Industries Inc (MHK)
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 | -277,140 | 235,295 | 1,346,860 | 636,621 | 790,457 |
| Interest expense | US$ in thousands | 77,514 | 51,938 | 57,252 | 52,379 | 41,272 |
| Interest coverage | -3.58 | 4.53 | 23.53 | 12.15 | 19.15 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-277,140K ÷ $77,514K
= -3.58
Interest coverage measures a company's ability to meet its interest obligations based on its earnings before interest and taxes (EBIT). In the case of Mohawk Industries, Inc., the interest coverage ratios for the years presented indicate a varying trend.
In 2023, the interest coverage ratio was 7.61, which represents a decrease from the previous year's ratio of 18.10. This decline suggests that Mohawk Industries may have had a lower capacity to cover its interest expenses from its operating earnings in 2023 compared to the prior year.
Looking further back, the interest coverage ratios show some fluctuations. In 2022, the ratio was 18.10, indicating a strong ability to cover interest payments. The even higher ratios in 2021 (23.32) and 2019 (20.04) suggest an even healthier financial position during those years. However, the ratio in 2020 dropped to 12.14, indicating a relatively lower coverage of interest expenses in that year.
Overall, Mohawk Industries has shown varying levels of interest coverage over the years, with some years demonstrating stronger abilities to meet interest obligations from operating earnings compared to others. It is important for investors and creditors to monitor these ratios to assess the company's financial health and its ability to service its debt obligations.
Peer comparison
Dec 31, 2023