Resideo Technologies Inc (REZI)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 410,000 | 495,000 | 571,000 | 593,000 | 598,000 | 614,000 | 578,000 | 609,000 | 601,000 | 542,000 | 598,000 | 505,000 | 459,000 | 536,000 | 465,000 | 337,000 | 243,000 | 534,000 | 462,000 | 504,000 |
| Interest expense (ttm) | US$ in thousands | 81,000 | 70,000 | 59,000 | 61,000 | 66,000 | 69,000 | 68,000 | 65,000 | 58,000 | 51,000 | 48,000 | 46,000 | 48,000 | 51,000 | 53,000 | 59,000 | 63,000 | 67,000 | 69,000 | 69,000 |
| Interest coverage | 5.06 | 7.07 | 9.68 | 9.72 | 9.06 | 8.90 | 8.50 | 9.37 | 10.36 | 10.63 | 12.46 | 10.98 | 9.56 | 10.51 | 8.77 | 5.71 | 3.86 | 7.97 | 6.70 | 7.30 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $410,000K ÷ $81,000K
= 5.06
The interest coverage ratio for Resideo Technologies Inc over the reported periods has shown some fluctuations. The interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
From March 31, 2020, to June 30, 2020, the interest coverage ratio decreased from 7.30 to 6.70, indicating a slight weakening in the company's ability to cover its interest expenses. However, the ratio improved in the following quarters, reaching a peak of 12.46 on June 30, 2022, which suggests a significant improvement in the company's ability to service its debt.
After June 30, 2022, the interest coverage ratio began to decline gradually, dropping to 5.06 by December 31, 2024. Although still above 1 (indicating the company's ability to cover interest payments), this decrease may raise concerns about the company's future ability to service its debt obligations.
Overall, Resideo Technologies Inc's interest coverage ratio has shown fluctuations over the reported periods, with periods of improvement and decline. It would be prudent for stakeholders to closely monitor future financial performance to ensure the company maintains a healthy interest coverage ratio.