nVent Electric PLC (NVT)
Interest coverage
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 620,600 | 643,600 | 622,500 | 587,400 | 552,100 | 516,400 | 474,400 | 440,400 | 404,300 | 381,500 | 365,100 | 355,400 | 340,800 | 101,500 | 58,500 | 38,400 | 46,500 | 274,200 | 315,900 | 333,100 |
| Interest expense (ttm) | US$ in thousands | 122,000 | 147,500 | 145,200 | 130,800 | 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 | 44,700 |
| Interest coverage | 5.09 | 4.36 | 4.29 | 4.49 | 8.71 | 11.23 | 14.92 | 14.12 | 13.17 | 12.39 | 11.63 | 11.00 | 10.33 | 3.05 | 1.69 | 1.05 | 1.21 | 6.59 | 7.16 | 7.45 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $620,600K ÷ $122,000K
= 5.09
nVent Electric PLC's interest coverage ratio has shown some fluctuations over the past few quarters. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.
Looking at the trend, we can see that the interest coverage ratio was relatively high in the earlier quarters of the data provided, indicating a strong ability to cover interest expenses with operating income. However, in the more recent quarters, the interest coverage ratio has decreased, albeit still at levels above 4, which generally indicates a healthy interest coverage.
The significant drop in interest coverage in the latter part of 2021 and the first quarter of 2021 raises a slight concern as it might indicate a potential strain on the company's ability to cover interest expenses comfortably with its operating income during that period. However, the subsequent improvements in interest coverage in the following quarters show that the company likely addressed this issue.
Overall, nVent Electric PLC's interest coverage ratio appears to have fluctuated but generally remains at levels that suggest the company is effectively managing its interest obligations relative to its operating income.
Peer comparison
Sep 30, 2024