Otis Worldwide Corp (OTIS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,186,000 | 2,033,000 | 2,108,000 | 1,639,000 |
| Interest expense | US$ in thousands | 155,000 | 140,000 | 136,000 | 124,000 |
| Interest coverage | 14.10 | 14.52 | 15.50 | 13.22 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,186,000K ÷ $155,000K
= 14.10
The interest coverage ratio of Otis Worldwide Corp has shown a consistent trend of improvement over the past five years. The ratio has increased from 11.06 in 2019 to 14.43 in 2023, indicating the company's ability to comfortably cover its interest expenses with operating income.
This trend suggests that Otis Worldwide Corp has been effectively managing its interest obligations relative to its operating earnings. A higher interest coverage ratio is generally seen as a positive indicator of financial health, showing that the company has a strong ability to meet its debt obligations from its earnings.
Overall, the increasing trend in Otis Worldwide Corp's interest coverage ratio reflects a solid financial position and a decreasing risk of financial distress due to interest payment obligations.
Peer comparison
Dec 31, 2023