Terex Corporation (TEX)
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 | 644,300 | 415,500 | 318,700 | 57,300 | 180,100 |
| Interest expense | US$ in thousands | 63,300 | 49,100 | 51,500 | 65,900 | 87,900 |
| Interest coverage | 10.18 | 8.46 | 6.19 | 0.87 | 2.05 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $644,300K ÷ $63,300K
= 10.18
Terex Corp.'s interest coverage ratio has shown a positive trend over the past five years. The interest coverage ratio, which measures the company's ability to meet its interest payments on outstanding debt, improved significantly from 4.12 in 2019 to 11.43 in 2023. This indicates that Terex Corp. has ample earnings to cover its interest expenses, reflecting a stronger financial position and reduced risk of default.
The steady increase in the interest coverage ratio from 1.10 in 2020 to 11.43 in 2023 suggests that the company's profitability and operational efficiency have been improving. This upward trend is positive for investors and creditors as it signifies the company's capacity to comfortably service its debt obligations.
Overall, Terex Corp.'s interest coverage ratio has exhibited strong performance in recent years, reflecting a healthier financial position and improved ability to meet its debt-related obligations.