Standard Motor Products Inc (SMP)
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 | 109,963 | 113,191 | 124,177 | 123,104 | 128,951 | 135,750 | 121,295 | 117,019 | 116,817 | 126,639 | 133,215 | 135,376 | 134,879 | 140,227 | 150,237 | 131,610 | 116,179 | 103,183 | 82,998 | 98,640 |
Interest expense (ttm) | US$ in thousands | 13,512 | 10,485 | 10,961 | 11,492 | 13,287 | 15,101 | 15,136 | 13,674 | 10,617 | 6,954 | 3,950 | 2,624 | 2,028 | 1,577 | 1,387 | 1,664 | 2,328 | 3,074 | 4,120 | 5,070 |
Interest coverage | 8.14 | 10.80 | 11.33 | 10.71 | 9.71 | 8.99 | 8.01 | 8.56 | 11.00 | 18.21 | 33.73 | 51.59 | 66.51 | 88.92 | 108.32 | 79.09 | 49.91 | 33.57 | 20.15 | 19.46 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $109,963K ÷ $13,512K
= 8.14
Standard Motor Products Inc has consistently maintained a healthy interest coverage ratio over the past few years, indicating its ability to meet its interest obligations comfortably through its operating earnings. The interest coverage ratio has shown a general upward trend from March 31, 2020, to June 30, 2021, reaching its peak at 108.32, reflecting a strong financial position during this period. However, starting from September 30, 2021, the interest coverage ratio began to decline gradually, indicating a potential decrease in the company's ability to cover its interest expenses.
The decreasing trend in the interest coverage ratio from September 30, 2021, to December 31, 2024, suggests that the company may be facing challenges in generating sufficient earnings to cover its interest payments. The ratio dropping below 1 may raise concerns about the company's ability to meet its interest obligations from its operating income alone.
Investors and creditors should closely monitor this trend in the interest coverage ratio as it provides insights into the company's financial health and debt servicing capability. A declining interest coverage ratio may indicate increased financial risk and the need for corrective actions to improve profitability or reduce interest expenses.
Peer comparison
Dec 31, 2024