Stanley Black & Decker Inc (SWK)
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 | 735,100 | 554,300 | 421,000 | 390,600 | 177,600 | 80,300 | 971,400 | 1,007,200 | 1,294,800 | 1,575,400 | 1,057,800 | 1,534,500 | 1,936,000 | 2,284,400 | 2,342,800 | 1,926,800 | 1,478,300 | 1,185,500 | 1,030,500 | 1,338,800 |
| Interest expense (ttm) | US$ in thousands | 498,600 | 471,800 | 485,000 | 508,300 | 507,300 | 533,600 | 480,700 | 414,300 | 338,500 | 270,200 | 224,300 | 192,600 | 185,400 | 193,200 | 200,100 | 210,900 | 223,100 | 234,800 | 254,500 | 269,600 |
| Interest coverage | 1.47 | 1.17 | 0.87 | 0.77 | 0.35 | 0.15 | 2.02 | 2.43 | 3.83 | 5.83 | 4.72 | 7.97 | 10.44 | 11.82 | 11.71 | 9.14 | 6.63 | 5.05 | 4.05 | 4.97 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $735,100K ÷ $498,600K
= 1.47
The interest coverage ratio of Stanley Black & Decker Inc has shown fluctuations over the reported periods. The ratio stood at 4.97 in March 2020, indicating that the company's operating income could cover its interest expense nearly 5 times. The ratio decreased to 4.05 in June 2020 but then increased consistently, reaching its peak at 11.82 in September 2021.
Subsequently, the interest coverage ratio started declining, dropping to 2.43 in March 2023 and further to 0.35 in December 2023. This suggests that the company's ability to meet its interest obligations from its operating income significantly weakened during these periods. By the end of December 2024, the ratio slightly improved to 1.47, but it remains at a relatively low level compared to the previous years.
The declining trend in the interest coverage ratio from its peak in September 2021 to the end of 2024 indicates potential financial stress or increased debt burden on Stanley Black & Decker Inc, as it indicates a reduction in the company's ability to cover its interest payments with its operating income. This could raise concerns about the company's financial health and its ability to manage debt obligations in the future.
Peer comparison
Dec 31, 2024