Enpro Industries (NPO)
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 | 98,000 | 265,100 | 202,800 | 191,600 | 54,400 |
| Interest expense | US$ in thousands | 45,000 | 35,600 | 16,200 | 16,500 | 19,600 |
| Interest coverage | 2.18 | 7.45 | 12.52 | 11.61 | 2.78 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $98,000K ÷ $45,000K
= 2.18
Interest coverage measures a company's ability to meet its interest obligations on debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income.
Looking at Enpro Inc's interest coverage over the past five years, we can observe fluctuating values. In 2023, the interest coverage ratio was 4.57, showing a slight improvement compared to the previous year's ratio of 4.05. This suggests that Enpro Inc's operating income was able to cover its interest expenses approximately 4.57 times in 2023.
In 2021, the interest coverage ratio was relatively high at 6.88, indicating a healthy ability to meet interest obligations. However, there was a significant decrease in 2020 with a ratio of 1.74, which could raise concerns about the company's ability to cover interest expenses with its operating income.
Overall, Enpro Inc's interest coverage has shown volatility over the five-year period, with some years indicating stronger coverage than others. It is important for stakeholders to monitor this ratio to assess the company's financial health and its ability to manage its debt obligations effectively.