Tennant Company (TNC)
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 | 138,600 | 142,500 | 129,200 | 107,200 | 86,300 | 70,200 | 71,700 | 59,500 | 81,400 | 77,100 | 71,500 | 84,900 | 59,400 | 67,500 | 72,000 | 71,300 | 71,500 | 69,400 | 63,500 | 60,600 |
| Interest expense (ttm) | US$ in thousands | 13,500 | 14,400 | 13,300 | 10,500 | 7,100 | 4,400 | 2,800 | 3,700 | 7,300 | 10,600 | 14,400 | 17,100 | 18,300 | 16,400 | 17,200 | 17,800 | 17,700 | 21,200 | 22,000 | 22,600 |
| Interest coverage | 10.27 | 9.90 | 9.71 | 10.21 | 12.15 | 15.95 | 25.61 | 16.08 | 11.15 | 7.27 | 4.97 | 4.96 | 3.25 | 4.12 | 4.19 | 4.01 | 4.04 | 3.27 | 2.89 | 2.68 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $138,600K ÷ $13,500K
= 10.27
Based on the interest coverage ratios provided for Tennant Co. over the past eight quarters, the company's ability to cover its interest expenses has shown a declining trend. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.
In Q4 2023, the interest coverage ratio was 10.27, indicating that the company generated operating income over 10 times its interest expenses during that quarter. Despite this healthy ratio, there was a slight decrease compared to the previous quarter's ratio of 9.90.
Looking at the historical data, Tennant Co.'s interest coverage ratio has fluctuated over the past eight quarters, ranging from as high as 21.75 in Q2 2022 to as low as 9.71 in Q2 2023. The ratios above 1 indicate that the company is able to comfortably meet its interest expenses from its operating income.
However, the declining trend in the interest coverage ratio over the past few quarters may suggest that the company's ability to cover its interest expenses is weakening. It is crucial for investors and stakeholders to monitor this trend closely, as a downward trend in the interest coverage ratio could indicate financial distress or potential difficulties in meeting debt obligations.
Peer comparison
Dec 31, 2023