Snap-On Inc (SNA)
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 | 1,354,400 | 1,335,200 | 1,306,000 | 1,266,700 | 1,227,500 | 1,208,500 | 1,181,400 | 1,151,100 | 1,120,600 | 1,104,000 | 1,082,300 | 943,600 | 870,100 | 819,200 | 797,600 | 899,500 | 954,300 | 959,600 | 959,700 | 957,800 |
| Interest expense (ttm) | US$ in thousands | 49,900 | 49,400 | 48,800 | 47,900 | 47,100 | 46,400 | 47,800 | 50,400 | 53,100 | 57,200 | 57,800 | 56,900 | 54,000 | 50,700 | 48,900 | 47,900 | 49,000 | 49,300 | 49,700 | 49,300 |
| Interest coverage | 27.14 | 27.03 | 26.76 | 26.44 | 26.06 | 26.05 | 24.72 | 22.84 | 21.10 | 19.30 | 18.72 | 16.58 | 16.11 | 16.16 | 16.31 | 18.78 | 19.48 | 19.46 | 19.31 | 19.43 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,354,400K ÷ $49,900K
= 27.14
The interest coverage ratio of Snap-On Inc has been consistently strong, indicating the company's ability to meet its interest payment obligations from its earnings. The ratio has shown a generally increasing trend over the past few years, reflecting a favorable position in terms of affordability of debt servicing. The ratio has consistently been above 15, a commonly accepted threshold for a healthy interest coverage ratio, and has even surpassed 25 multiple times in recent quarters, demonstrating a high level of earnings relative to interest expenses. This suggests that Snap-On Inc has a robust ability to cover its interest costs with operating income, signaling financial stability and sound financial management.
Peer comparison
Dec 31, 2023