Stanley Black & Decker Inc (SWK)
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 | 154,900 | 140,000 | 947,800 | 982,500 | 1,268,600 | 1,498,000 | 1,061,900 | 1,532,200 | 1,929,700 | 2,267,300 | 2,334,000 | 1,939,100 | 1,494,500 | 1,163,600 | 999,700 | 1,301,600 | 1,364,800 | 1,355,200 | 1,352,300 | 1,298,300 |
| Interest expense (ttm) | US$ in thousands | 559,400 | 534,000 | 481,100 | 414,700 | 338,500 | 270,400 | 224,300 | 192,600 | 185,400 | 192,600 | 199,700 | 210,500 | 222,700 | 232,700 | 252,400 | 267,500 | 282,200 | 292,800 | 292,500 | 289,100 |
| Interest coverage | 0.28 | 0.26 | 1.97 | 2.37 | 3.75 | 5.54 | 4.73 | 7.96 | 10.41 | 11.77 | 11.69 | 9.21 | 6.71 | 5.00 | 3.96 | 4.87 | 4.84 | 4.63 | 4.62 | 4.49 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $154,900K ÷ $559,400K
= 0.28
The interest coverage ratio for Stanley Black & Decker Inc fluctuated over the periods provided, ranging from as low as 0.26 to as high as 11.77. A low interest coverage ratio, such as 0.26 or 0.28, indicates that the company may have difficulty meeting its interest obligations with its current level of operating income. This could be a cause for concern as it suggests a higher risk of defaulting on its debt.
On the other hand, a higher interest coverage ratio, such as 11.77 or 10.41, indicates the company is more capable of servicing its interest payments with its operating income. This is a positive sign of financial health and stability, showing that the company has a strong ability to meet its interest obligations.
It is notable that the interest coverage ratio has shown variability over time, with peaks and troughs seen in the data. This variability may be attributed to changes in the company's profitability, cost of debt, or other factors affecting its income and interest expenses.
Overall, a consistently high interest coverage ratio is desirable as it indicates a company's ability to comfortably meet its interest obligations. Monitoring this ratio is crucial for assessing the financial risk and sustainability of a company's debt levels.
Peer comparison
Dec 31, 2023