Mettler-Toledo International Inc (MTD)

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	1,111,850	1,051,090	1,125,980	992,603	787,359
Interest expense	US$ in thousands	74,631	77,366	55,392	43,242	38,616
Interest coverage		14.90	13.59	20.33	22.95	20.39

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,111,850K ÷ $74,631K
= 14.90

Interest coverage measures a company's ability to meet its interest payment obligations using its operating income. In the case of Mettler-Toledo International Inc, the interest coverage ratio has shown a generally healthy trend over the past five years.

As of December 31, 2020, the interest coverage ratio stood at 20.39, indicating that the company's operating income was more than sufficient to cover its interest expenses. This ratio improved to 22.95 by December 31, 2021, reflecting even stronger capacity to meet interest payments.

Subsequently, there was a slight decline in the interest coverage ratio to 20.33 by December 31, 2022. However, the ratio remained at a comfortable level, signaling continued financial stability.

A more significant decrease was observed by December 31, 2023, when the interest coverage ratio dropped to 13.59. While this may raise some concerns about the company's ability to cover interest expenses, it is important to note that the ratio was still above 1, indicating that the company generated enough operating income to cover its interest obligations.

By the end of December 2024, the interest coverage ratio improved to 14.90, showing a recovery from the previous year. Overall, Mettler-Toledo International Inc's interest coverage ratio has demonstrated a solid performance, with some fluctuations in recent years but generally remaining at levels that suggest the company is able to comfortably meet its interest payments.