Sherwin-Williams Co (SHW)
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 | 3,527,400 | 2,963,900 | 2,583,300 | 2,859,600 | 2,331,100 |
| Interest expense | US$ in thousands | 417,500 | 390,800 | 334,700 | 340,400 | 349,300 |
| Interest coverage | 8.45 | 7.58 | 7.72 | 8.40 | 6.67 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,527,400K ÷ $417,500K
= 8.45
Sherwin-Williams Co.'s interest coverage ratio has shown a generally positive trend over the past five years. The ratio has improved from 6.94 in 2019 to 9.21 in 2023. This indicates that the company's ability to cover its interest expenses with operating income has strengthened over time.
A higher interest coverage ratio suggests that the company is in a better position to meet its interest obligations using its operating profits. This trend indicates improved financial health and reduced risk of potential financial distress due to debt repayment obligations.
Overall, based on the trend in the interest coverage ratio, Sherwin-Williams Co. appears to have a healthy financial position and is efficiently managing its interest expenses relative to its operating income.
Peer comparison
Dec 31, 2023