Middleby Corp (MIDD)
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 | 682,198 | 632,641 | 606,773 | 605,343 | 585,402 | 650,047 | 663,320 | 645,776 | 602,192 | 534,227 | 476,734 | 459,523 | 477,920 | 433,158 | 433,324 | 306,383 | 315,845 | 380,882 | 374,551 | 465,389 |
| Interest expense (ttm) | US$ in thousands | 92,229 | 108,774 | 118,455 | 125,418 | 128,606 | 118,485 | 111,472 | 100,785 | 88,977 | 76,239 | 65,364 | 58,744 | 57,157 | 66,217 | 71,443 | 78,971 | 78,617 | 75,156 | 77,584 | 77,802 |
| Interest coverage | 7.40 | 5.82 | 5.12 | 4.83 | 4.55 | 5.49 | 5.95 | 6.41 | 6.77 | 7.01 | 7.29 | 7.82 | 8.36 | 6.54 | 6.07 | 3.88 | 4.02 | 5.07 | 4.83 | 5.98 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $682,198K ÷ $92,229K
= 7.40
Middleby Corp's interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt obligations. The trend analysis of the interest coverage ratio from March 31, 2020, to December 31, 2024, shows fluctuation in the company's ability to cover its interest expenses.
The interest coverage ratio peaked at 8.36 on December 31, 2021, indicating the company generated sufficient operating income to cover its interest expenses at that point. However, the ratio decreased in the following periods, reaching a low point of 3.88 on March 31, 2021, and 4.02 on December 31, 2020, which could be a point of concern indicating potential difficulty in meeting interest payments.
Subsequently, the interest coverage ratio showed some improvement, with ratios consistently above 6 from June 30, 2021, to June 30, 2022. This suggests the company's ability to cover its interest expenses improved during this period.
However, from March 31, 2023, onwards, the interest coverage ratio started declining again, indicating a potential increase in the risk of default on interest payments. The ratio dropped to 4.55 on December 31, 2023, which is a signal for investors and lenders to closely monitor the company's financial health.
Overall, the fluctuating trend in Middleby Corp's interest coverage ratio highlights the importance of continuous monitoring of the company's financial performance and debt management practices to ensure sustainable operations.
Peer comparison
Dec 31, 2024