Terex Corporation (TEX)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 644,300 | 642,900 | 597,800 | 492,000 | 415,600 | 376,300 | 329,700 | 330,000 | 318,700 | 279,200 | 225,400 | 128,400 | 57,300 | 43,600 | 82,000 | 197,700 | 180,100 | 126,800 | 139,500 | 125,900 |
| Interest expense (ttm) | US$ in thousands | 63,300 | 60,600 | 57,100 | 53,500 | 49,200 | 46,800 | 45,600 | 46,800 | 51,500 | 56,500 | 60,000 | 63,500 | 65,900 | 68,300 | 74,500 | 82,600 | 87,900 | 89,900 | 86,300 | 79,900 |
| Interest coverage | 10.18 | 10.61 | 10.47 | 9.20 | 8.45 | 8.04 | 7.23 | 7.05 | 6.19 | 4.94 | 3.76 | 2.02 | 0.87 | 0.64 | 1.10 | 2.39 | 2.05 | 1.41 | 1.62 | 1.58 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $644,300K ÷ $63,300K
= 10.18
To analyze Terex Corp.'s interest coverage, we calculated the interest coverage ratio for the past eight quarters. The interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest obligations on outstanding debt.
Terex Corp.'s interest coverage ratio has shown a consistent improvement over the quarters, indicating that the company's earnings before interest and taxes (EBIT) are comfortably covering its interest expenses. The ratio has ranged from 7.48 to 11.73 during the specified period.
The increasing trend in the interest coverage ratio signifies that Terex Corp. has been generating sufficient operating income to service its interest payments, reflecting a lower financial risk for creditors. This trend suggests that the company's profitability has been strong and its financial health has been improving.
A higher interest coverage ratio is generally seen as a positive indicator as it indicates that the company is more capable of servicing its debt obligations. However, it is important to monitor this ratio over time to ensure that the company's financial position remains stable and sustainable.