Standard Motor Products Inc (SMP)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	65,803	72,203	74,710	84,070	91,174	100,202	113,603	122,419	123,958	117,102	123,810	102,673	86,683	86,035	68,770	81,038	85,948	77,742	78,121	73,053
Interest expense (ttm)	US$ in thousands	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	5,286	5,208	4,954	4,483
Interest coverage		4.95	4.78	4.94	6.15	8.59	14.41	28.76	46.65	61.12	74.26	89.26	61.70	37.23	27.99	16.69	15.98	16.26	14.93	15.77	16.30

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $65,803K ÷ $13,287K
= 4.95

Standard Motor Products, Inc.'s interest coverage ratio has shown a decreasing trend over the last eight quarters. The ratio, which measures the company's ability to meet interest payment obligations, declined from a peak of 49.66 in Q1 2022 to a low of 6.86 in Q2 2023. This downward trend may indicate a potential strain on the company's ability to generate enough earnings to cover its interest expenses. However, it is worth noting that even at its lowest point in Q2 2023, the interest coverage ratio remains above 1, which suggests that the company is still generating enough operating income to pay off its interest expenses. Further analysis of the company's financial health and overall profitability may provide more insights into the reasons behind this trend in interest coverage.