Teledyne Technologies Incorporated (TDY)

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	1,075,300	1,103,300	1,067,000	967,000	945,700	914,800	899,500	876,600	856,300	728,800	629,000	490,000	405,700	408,100	381,100	400,700	398,100	387,200	393,600	417,200
Interest expense (ttm)	US$ in thousands	44,200	59,800	62,500	69,000	77,300	84,200	87,800	88,000	89,300	90,300	92,100	90,800	104,200	84,100	64,400	46,900	15,300	16,600	18,000	19,700
Interest coverage		24.33	18.45	17.07	14.01	12.23	10.86	10.24	9.96	9.59	8.07	6.83	5.40	3.89	4.85	5.92	8.54	26.02	23.33	21.87	21.18

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,075,300K ÷ $44,200K
= 24.33

Teledyne Technologies Incorporated's interest coverage ratio reflects its ability to comfortably cover interest expenses with its earnings. From March 31, 2020, to March 31, 2021, the company exhibited a consistently high interest coverage ratio, ranging from 21.18 to 26.02. However, starting from the first quarter of 2021, there was a noticeable decline in the interest coverage ratio, dropping to a low of 3.89 by December 31, 2021.

This significant decline suggests a potential strain on the company's ability to meet its interest obligations using its operating income alone. This concerning trend continued through the first half of 2022, with the interest coverage ratio hovering between 5.40 and 6.83.

Subsequently, there was a slight improvement in the interest coverage ratio in the second half of 2022 and the first quarter of 2023, reaching a range of 9.59 to 10.86. By the end of December 31, 2023, the interest coverage ratio had improved further to 12.23, indicating an enhanced ability to cover interest expenses.

The trend continued to improve in the following periods, with interest coverage ratios of 14.01, 17.07, and 18.45 by March 31, June 30, and September 30, 2024, respectively. Notably, by the end of December 31, 2024, the interest coverage ratio had risen significantly to 24.33, signaling a robust ability to cover interest expenses with operating income.

Overall, the analysis of Teledyne Technologies Incorporated's interest coverage ratio reveals fluctuations over the periods examined, with a period of concern in 2021 but a subsequent recovery and improvement in the following years, ultimately indicating a healthier financial position in managing its interest obligations.