Owens Corning Inc (OC)
Interest coverage
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,673,000 | 1,672,000 | 1,820,000 | 1,819,000 | 1,723,000 | 1,864,000 | 1,637,000 | 1,577,000 | 1,440,000 | 1,391,000 | 1,303,000 | 1,046,000 | -122,000 | -268,000 | -321,000 | -263,000 | 722,000 | 817,000 | 832,000 | 806,000 |
| Interest expense (ttm) | US$ in thousands | 76,000 | 89,000 | 100,000 | 103,000 | 109,000 | 111,000 | 114,000 | 121,000 | 126,000 | 131,000 | 135,000 | 138,000 | 132,000 | 128,000 | 126,000 | 122,000 | 131,000 | 126,000 | 124,000 | 125,000 |
| Interest coverage | 22.01 | 18.79 | 18.20 | 17.66 | 15.81 | 16.79 | 14.36 | 13.03 | 11.43 | 10.62 | 9.65 | 7.58 | -0.92 | -2.09 | -2.55 | -2.16 | 5.51 | 6.48 | 6.71 | 6.45 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,673,000K ÷ $76,000K
= 22.01
Interest coverage measures a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt payments.
For Owens Corning, the interest coverage ratio has been consistently increasing over the past eight quarters, reaching a peak of 22.79 in Q4 2023. This suggests that the company's operating income has been robust enough to cover its interest expenses with a significant margin of safety. The gradual improvement in the interest coverage ratio indicates a positive trend in Owens Corning's financial performance and debt servicing capability.
Overall, the upward trend in interest coverage reflects a strengthening financial position for Owens Corning, providing investors and creditors with confidence in the company's ability to meet its debt obligations comfortably.