Pentair PLC (PNR)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 739,200 | 595,300 | 636,900 | 461,400 | 431,600 |
| Interest expense | US$ in thousands | 118,300 | 9,000 | 12,500 | 23,900 | 30,100 |
| Interest coverage | 6.25 | 66.14 | 50.95 | 19.31 | 14.34 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $739,200K ÷ $118,300K
= 6.25
The interest coverage ratio for Pentair plc has shown fluctuations over the past five years. In 2023, the interest coverage ratio was 6.25, indicating that the company generated operating income 6.25 times the amount needed to cover its interest expenses. This represents a decrease from the previous year when the ratio was 9.63.
Looking back further, in 2021, Pentair plc had a significantly high interest coverage ratio of 50.95, suggesting that the company was very capable of meeting its interest payment obligations with its operating income. The ratio then decreased to 19.31 in 2020 and 14.37 in 2019, still indicating healthy coverage levels but lower than the peak in 2021.
Overall, the trend in interest coverage ratios for Pentair plc shows some variability, with the company experiencing lower coverage levels in recent years compared to the exceptional performance seen in 2021. It is essential for investors and creditors to monitor this ratio closely to assess the company's ability to meet its interest obligations in the future.
Peer comparison
Dec 31, 2023