Minerals Technologies Inc (MTX)
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 | 167,000 | 198,200 | 238,200 | 175,000 | 198,700 |
| Interest expense | US$ in thousands | 59,200 | 43,900 | 37,200 | 38,200 | 43,200 |
| Interest coverage | 2.82 | 4.51 | 6.40 | 4.58 | 4.60 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $167,000K ÷ $59,200K
= 2.82
Minerals Technologies, Inc.'s interest coverage ratio, calculated as EBIT divided by interest expense, has exhibited a declining trend over the past five years. The company's interest coverage ratio decreased from 5.43 in 2019 to 4.80 in 2023. This suggests that the company's ability to cover its interest expenses with its earnings before interest and taxes has weakened over the period.
While an interest coverage ratio above 1 indicates that a company is generating sufficient earnings to cover its interest obligations, a declining trend may raise concerns about the company's financial health and ability to meet its debt obligations. It is essential for investors and creditors to monitor this trend closely, as a further deterioration in the interest coverage ratio could signal potential financial distress for Minerals Technologies, Inc.
Peer comparison
Dec 31, 2023