Mettler-Toledo International Inc (MTD)

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	1,111,854	1,031,668	1,025,554	1,046,079	1,051,094	1,140,702	1,159,634	1,146,439	1,125,984	1,024,812	993,821	965,187	935,733	907,139	862,880	786,894	720,727	749,452	713,492	712,753
Interest expense (ttm)	US$ in thousands	74,631	76,436	78,115	78,414	77,366	74,516	68,722	62,238	55,392	50,128	47,435	45,109	43,242	41,206	38,725	37,868	38,616	38,746	39,236	38,536
Interest coverage		14.90	13.50	13.13	13.34	13.59	15.31	16.87	18.42	20.33	20.44	20.95	21.40	21.64	22.01	22.28	20.78	18.66	19.34	18.18	18.50

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,111,854K ÷ $74,631K
= 14.90

Interest coverage ratio is a financial metric used to evaluate a company's ability to comfortably meet its interest payment obligations on outstanding debt. Mettler-Toledo International Inc has maintained a consistently strong interest coverage ratio over the past few years. The ratio has generally ranged between 18 to 22, indicating that the company's operating income is sufficient to cover its interest expenses by a significant margin.

The interest coverage ratio peaked at around 22.28 in June 2021 and has since trended downwards, albeit remaining above 20. This steady performance suggests that Mettler-Toledo International Inc has a solid financial position and is well-equipped to manage its debt obligations without putting excessive strain on its profitability.

However, it is worth noting that towards the end of the reporting period in December 2024, the interest coverage ratio declined to around 14.90. This decrease may indicate a potential for increased financial risk if the trend continues, as it suggests that the company's ability to cover interest payments has weakened compared to previous periods.

Overall, while Mettler-Toledo International Inc has historically demonstrated strong interest coverage, investors and stakeholders should closely monitor any further changes in the ratio to assess the company's ability to sustain its debt payments in the long term.