Otis Worldwide Corp (OTIS)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,186,000 | 2,155,000 | 2,113,000 | 2,020,000 | 2,033,000 | 2,038,000 | 2,051,000 | 2,125,000 | 2,108,000 | 2,052,000 | 1,964,000 | 1,819,000 | 1,605,000 |
| Interest expense (ttm) | US$ in thousands | 155,000 | 139,000 | 136,000 | 137,000 | 140,000 | 141,000 | 140,000 | 139,000 | 136,000 | 130,000 | 136,000 | 144,000 | 116,000 |
| Interest coverage | 14.10 | 15.50 | 15.54 | 14.74 | 14.52 | 14.45 | 14.65 | 15.29 | 15.50 | 15.78 | 14.44 | 12.63 | 13.84 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,186,000K ÷ $155,000K
= 14.10
Based on the data provided, Otis Worldwide Corp has consistently maintained a strong interest coverage ratio over the past eight quarters. The interest coverage ratio has ranged from 13.40 to 14.85, with Q2 2022 showing the lowest ratio at 13.40 and Q1 2022 with the highest ratio at 14.85.
The overall trend indicates that Otis Worldwide Corp generates earnings significantly higher than its interest expenses, with an average interest coverage ratio of approximately 14.34 over the period. This implies that the company has a robust ability to meet its interest obligations through operating profits.
The consistent high interest coverage ratios suggest that Otis Worldwide Corp is effectively managing its debt and is less vulnerable to potential financial distress resulting from changes in interest rates or operating performance. Investors and creditors may view this positively as a signal of financial stability and sound financial management within the company.
Peer comparison
Dec 31, 2023