Transdigm Group Incorporated (TDG)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,531,000 | 2,923,000 | 2,215,000 | 1,691,000 | 1,751,000 |
| Interest expense | US$ in thousands | 1,286,000 | 1,164,000 | 1,076,000 | 1,059,000 | 4,000 |
| Interest coverage | 2.75 | 2.51 | 2.06 | 1.60 | 437.75 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,531,000K ÷ $1,286,000K
= 2.75
Transdigm Group Incorporated's interest coverage ratio has shown a generally increasing trend over the past five years, indicating its ability to comfortably meet interest obligations. The ratio has improved from 1.60 in 2021 to 2.75 in 2024, demonstrating a positive financial health in terms of servicing its debt with earnings before interest and taxes. The significant spike in 2020 to 437.75 may be an anomaly or could be due to unique circumstances during that period. Overall, the steady increase in the interest coverage ratio reflects the company's improved ability to cover interest expenses with its earnings, suggesting a favorable financial position.