Oshkosh Corporation (OSK)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Sep 30, 2023	Dec 31, 2022	Sep 30, 2022
Earnings before interest and tax (EBIT)	US$ in thousands	1,022,500	843,800	—	372,300	372,300
Interest expense	US$ in thousands	119,500	68,600	68,600	53,400	53,400
Interest coverage		8.56	12.30	0.00	6.97	6.97

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,022,500K ÷ $119,500K
= 8.56

Interest coverage ratio is a financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally seen as favorable as it suggests the company is generating enough operating income to comfortably meet its interest obligations.

In the case of Oshkosh Corporation, the interest coverage ratio has fluctuated over the years:
- As of September 30, 2022, the interest coverage ratio was 6.97, which indicates that the company's operating income was nearly 7 times its interest expenses, reflecting a strong ability to cover interest costs.
- The ratio remained consistent at 6.97 as of December 31, 2022.
- However, there was a significant decrease in the interest coverage ratio to 0.00 as of September 30, 2023. This suggests that the company may be facing challenges in generating sufficient operating income to cover its interest expenses.
- The ratio improved to 12.30 as of December 31, 2023, indicating a strong recovery in the company's ability to cover interest costs.
- By December 31, 2024, the interest coverage ratio stood at 8.56, showing a solid performance in generating operating income relative to interest expenses.

Overall, while Oshkosh Corporation experienced fluctuations in its interest coverage ratio during the period analyzed, the company has exhibited the ability to manage its interest expenses effectively, with some periods showing exceptional coverage levels while others indicating potential challenges that may need to be addressed.