Enpro Industries (NPO)
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 | 148,100 | 142,000 | 141,300 | 137,000 | 148,200 | 142,200 | 153,400 | 158,500 | 142,100 | 222,800 | 224,600 | 190,200 | 190,100 | 78,500 | -9,900 | -22,700 | -27,400 | -47,300 | -1,300 | 17,400 |
| Interest expense (ttm) | US$ in thousands | 40,900 | 41,500 | 41,900 | 43,600 | 45,000 | 46,300 | 44,900 | 40,200 | 35,600 | 28,500 | 23,100 | 19,400 | 16,300 | 15,900 | 15,900 | 15,800 | 16,500 | 18,500 | 18,600 | 19,200 |
| Interest coverage | 3.62 | 3.42 | 3.37 | 3.14 | 3.29 | 3.07 | 3.42 | 3.94 | 3.99 | 7.82 | 9.72 | 9.80 | 11.66 | 4.94 | -0.62 | -1.44 | -1.66 | -2.56 | -0.07 | 0.91 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $148,100K ÷ $40,900K
= 3.62
Enpro Industries' interest coverage ratio experienced significant fluctuations over the past few years. The ratio was concerning during the first half of 2020, with values below 0, indicating the company was struggling to meet its interest obligations with its earnings. However, there was a noticeable improvement starting in the second half of 2021, reaching a peak of 11.66 by the end of that year. This sharp increase suggests that Enpro Industries was generating significantly more operating income relative to its interest expenses.
Subsequently, the interest coverage ratio remained relatively stable throughout 2022 and 2023, hovering around 3 to 4, which is generally considered a healthy level indicating the company's ability to comfortably cover its interest payments. This steady performance suggests Enpro Industries managed to sustain its profitability and effectively manage its debt obligations during this period.
However, towards the end of 2024, the interest coverage ratio showed a slight uptick, indicating a potential decline in the company's ability to cover its interest expenses comfortably compared to the previous periods. It is advisable for Enpro Industries to closely monitor its financial performance and ensure that its earnings remain sufficient to support its interest payments to avoid potential financial distress in the future.