Sensient Technologies Corporation (SXT)

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	155,023	196,751	170,028	152,656	121,110
Interest expense	US$ in thousands	25,172	14,547	12,544	14,811	20,107
Interest coverage		6.16	13.53	13.55	10.31	6.02

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $155,023K ÷ $25,172K
= 6.16

The interest coverage ratio measures a company's ability to meet its interest obligations. Sensient Technologies Corp.'s interest coverage ratio has fluctuated over the past five years. In 2023, the company's interest coverage ratio was at 6.16, indicating that it was able to cover its interest expenses 6.16 times over with its earnings before interest and taxes (EBIT). This represents a decrease from the previous year, where the ratio was 13.53.

The peak in interest coverage was observed in 2021 and 2022 at 13.55 and 13.53 respectively, suggesting a strong ability to cover interest payments during those years. In comparison, the lowest point within this period was in 2019, with an interest coverage ratio of 6.02, indicating a relatively weaker ability to cover interest expenses.

Overall, Sensient Technologies Corp.'s interest coverage has shown some variability, but generally, the company has demonstrated a solid ability to meet its interest obligations over the past five years, despite some fluctuations in the ratio. It is important for investors and stakeholders to monitor this ratio to assess the company's financial health and its ability to manage debt effectively.