Tempur Sealy International Inc (TPX)
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 | 601,400 | 677,700 | 889,100 | 528,400 | 349,900 |
| Interest expense | US$ in thousands | 129,900 | 103,000 | 66,300 | 77,000 | 85,700 |
| Interest coverage | 4.63 | 6.58 | 13.41 | 6.86 | 4.08 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $601,400K ÷ $129,900K
= 4.63
Tempur Sealy International Inc's interest coverage ratio has fluctuated over the past five years, indicating the company's ability to meet its interest payment obligations. A higher interest coverage ratio is generally preferred as it signifies a stronger ability to cover interest expenses with operating profits.
In 2021, the interest coverage ratio was the highest at 13.76, indicating that the company generated operating profits nearly 14 times more than its interest expenses, reflecting a robust financial position and lower financial risk.
However, in subsequent years, the interest coverage ratio decreased, with 2023 showing the lowest at 4.67. This decrease suggests that Tempur Sealy International Inc's ability to cover interest expenses with operating profits has weakened compared to the previous year, indicating increased financial risk.
Overall, while the company's interest coverage ratio has varied annually, it is essential for stakeholders to monitor this metric closely to assess Tempur Sealy International Inc's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023