nVent Electric PLC (NVT)
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 | 590,900 | 607,800 | 652,200 | 637,400 | 599,800 | 645,200 | 589,800 | 538,200 | 504,800 | 416,800 | 395,400 | 379,600 | 369,900 | 332,200 | 90,300 | 47,200 | 26,900 | 50,300 | 277,800 | 319,200 |
| Interest expense (ttm) | US$ in thousands | 106,000 | 101,000 | 96,100 | 93,800 | 79,400 | 63,400 | 46,000 | 31,800 | 31,200 | 30,700 | 30,800 | 31,400 | 32,300 | 33,000 | 33,300 | 34,600 | 36,400 | 38,500 | 41,600 | 44,100 |
| Interest coverage | 5.57 | 6.02 | 6.79 | 6.80 | 7.55 | 10.18 | 12.82 | 16.92 | 16.18 | 13.58 | 12.84 | 12.09 | 11.45 | 10.07 | 2.71 | 1.36 | 0.74 | 1.31 | 6.68 | 7.24 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $590,900K ÷ $106,000K
= 5.57
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt using its operating income. A higher ratio indicates stronger ability to cover interest expenses.
Analyzing the data provided, we observe fluctuations in nVent Electric PLC's interest coverage ratio over the periods mentioned. From March 31, 2020, to June 30, 2021, the interest coverage declined steadily from 7.24 to 2.71, indicating a potential weakening ability to cover interest expenses during this period.
However, starting from September 30, 2021, there is a notable improvement in the interest coverage ratio, reaching a peak of 16.92 on March 31, 2023. This significant increase signifies a strong recovery and improved financial health for nVent Electric PLC, as it indicates a robust ability to cover interest payments using operating income.
Subsequently, the interest coverage ratio experienced some fluctuations but generally remained relatively stable above 5 from June 30, 2023, to December 31, 2024, indicating that the company maintained a healthy level of coverage for its interest expenses during this period.
Overall, the trend in nVent Electric PLC's interest coverage ratio demonstrates a period of potential financial challenges followed by a significant improvement and subsequent stability, reflecting varying levels of financial strength and performance over the analyzed periods.
Peer comparison
Dec 31, 2024