Stanley Black & Decker Inc (SWK)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 154,900 | 1,268,600 | 1,929,700 | 1,494,500 | 1,364,800 |
| Interest expense | US$ in thousands | 559,400 | 338,500 | 185,400 | 222,700 | 282,200 |
| Interest coverage | 0.28 | 3.75 | 10.41 | 6.71 | 4.84 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $154,900K ÷ $559,400K
= 0.28
The interest coverage ratio of Stanley Black & Decker Inc has experienced fluctuations over the past five years. The ratio was weak at 0.28 in 2023, indicating that the company's operating income was significantly lower than its interest expenses, which could raise concerns about its ability to meet its debt obligations through operational earnings alone.
In 2022, the interest coverage improved to 3.75, suggesting that the company's operating income was able to cover its interest expenses nearly four times over. This signifies a stronger financial position compared to 2023.
In 2021, the interest coverage ratio was robust at 10.41, indicating a healthy financial position with ample operating income to cover interest expenses. This strong coverage declined slightly in 2020 to 6.71 but increased from the previous year.
The ratio was 4.84 in 2019, showing a moderate coverage level where the operating income exceeded interest expenses by a little less than five times.
Overall, while Stanley Black & Decker Inc's interest coverage has shown some variability over the years, it is important to consider the trend and the context of the industry to assess the company's ability to service its debt obligations effectively.
Peer comparison
Dec 31, 2023