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

Company name
Symbol
Interest coverage
Snap-On Inc
SNA
-8.89
Simpson Manufacturing Company Inc
SSD
79.99
Stanley Black & Decker Inc
SWK
0.28