Snap-On Inc (SNA)
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 | -440,900 | 2,275,300 | 1,365,600 | 1,369,900 | 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 |
| Interest expense (ttm) | US$ in thousands | 49,600 | 49,800 | 49,700 | 50,000 | 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 |
| Interest coverage | -8.89 | 45.69 | 27.48 | 27.40 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-440,900K ÷ $49,600K
= -8.89
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt with its operating income. A higher interest coverage ratio indicates a company is more capable of meeting its interest obligations.
Looking at Snap-On Inc's interest coverage ratio over the past years, we can see a generally positive trend. From March 31, 2020, to December 31, 2024, the interest coverage ratio has been consistently above 1, signaling that the company has generated sufficient operating income to cover its interest expenses.
There was a significant improvement in the interest coverage ratio from March 31, 2020, to December 31, 2024, reaching a peak of 45.69 on September 30, 2024. This indicates the company's ability to comfortably cover its interest payments with its operating income.
However, it is notable that there was a sharp decline in the interest coverage ratio to -8.89 on December 31, 2024. This negative ratio may suggest potential financial distress or a mismatch between the company's earnings and its interest expenses. It would be essential for stakeholders and investors to further investigate the reasons behind this anomaly and assess the company's overall financial health.
Overall, the increasing trend in Snap-On Inc's interest coverage ratio demonstrates a positive financial performance in meeting its interest obligations, with the exception of the notable decline at the end of 2024, warranting further scrutiny.
Peer comparison
Dec 31, 2024