Interface Inc (TILE)
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 | 95,441 | 71,846 | 102,314 | -50,176 | 127,472 |
| Interest expense | US$ in thousands | 31,787 | 29,929 | 29,681 | 29,244 | 25,656 |
| Interest coverage | 3.00 | 2.40 | 3.45 | -1.72 | 4.97 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $95,441K ÷ $31,787K
= 3.00
Interface Inc.'s interest coverage ratio has varied over the past five years. The ratio indicates the company's ability to meet its interest obligations through its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally considered favorable as it implies the company has more earnings available to cover its interest expenses.
In 2023, the interest coverage ratio was 3.21, which suggests that the company's EBIT was sufficient to cover its interest expenses approximately three times. This ratio decreased compared to the previous year, indicating a potential decrease in earnings relative to interest expenses.
In 2022 and 2021, the interest coverage ratios were 3.79 and 3.65, respectively, indicating consistent but slightly decreasing coverage over those years compared to 2020. This may suggest that the company's ability to cover interest expenses slightly weakened during those years.
On the other hand, in 2020, the interest coverage ratio was relatively low at 2.64, indicating that the company had less earnings available to cover its interest expenses, potentially raising concerns about the company's financial health.
In 2019, the interest coverage ratio was the highest at 5.61, indicating a strong ability to cover interest expenses with earnings. This suggests that the company was in a better financial position relative to the other years evaluated.
Overall, Interface Inc.'s interest coverage has fluctuated over the past five years, with some variation in its ability to cover interest expenses with earnings. It would be important to monitor this ratio in the future to assess the company's financial stability and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023