Pentair PLC (PNR)

Interest coverage ratio is a measure of a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Looking at Pentair PLC's interest coverage ratio over the past five years, we can see a fluctuating trend. In December 2020, the interest coverage ratio was 19.31, which indicates that the company's earnings were sufficient to cover its interest expenses almost 19 times. This ratio improved significantly in the following years, reaching 50.95 in December 2021 and further increasing to 66.14 in December 2022. These higher ratios suggest a strong ability to comfortably meet interest payments.

However, there was a notable decline in the interest coverage ratio in December 2023, dropping to 6.25. This significant decrease may raise concerns about the company's ability to cover its interest expenses with its earnings during that period. In December 2024, the interest coverage ratio improved slightly to 9.07, but it still remains below the levels seen in the earlier years.

Overall, while Pentair PLC demonstrated strong interest coverage ratios in 2021 and 2022, the notable decrease in 2023 and the modest recovery in 2024 indicate some fluctuation in the company's ability to cover its interest obligations. It would be important for stakeholders to monitor this ratio closely in the future to ensure the company's financial health and ability to meet its debt obligations.

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Dec 31, 2024