Tempur Sealy International Inc (TPX)
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 | 586,700 | 628,300 | 646,200 | 630,600 | 677,700 | 783,600 | 832,600 | 895,500 | 889,100 | 828,500 | 760,700 | 608,200 | 528,400 | 420,400 | 358,800 | 385,700 | 349,900 | 318,100 | 279,400 | 254,300 |
| Interest expense (ttm) | US$ in thousands | 129,900 | 130,600 | 124,800 | 114,900 | 103,000 | 91,900 | 78,600 | 74,900 | 66,300 | 61,800 | 68,400 | 69,000 | 77,000 | 81,000 | 81,700 | 83,600 | 85,700 | 88,500 | 91,300 | 92,000 |
| Interest coverage | 4.52 | 4.81 | 5.18 | 5.49 | 6.58 | 8.53 | 10.59 | 11.96 | 13.41 | 13.41 | 11.12 | 8.81 | 6.86 | 5.19 | 4.39 | 4.61 | 4.08 | 3.59 | 3.06 | 2.76 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $586,700K ÷ $129,900K
= 4.52
The interest coverage ratio of Tempur Sealy International Inc has shown a decreasing trend over the past eight quarters, starting at 12.18 in Q1 2022 and declining to 4.67 in Q4 2023. This ratio measures the company's ability to meet its interest obligations on outstanding debt using its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income.
The declining trend in the interest coverage ratio may raise concerns about the company's ability to comfortably meet its interest payments in the future. It suggests that the company's operating income may not be growing at a sufficient rate to keep up with its interest expenses. Investors and creditors may view a decreasing interest coverage ratio as a red flag, signaling potential financial distress or challenges in servicing debt obligations. Further analysis of the company's financial health and its ability to generate sustainable earnings would be necessary to provide a comprehensive assessment of its financial position.
Peer comparison
Dec 31, 2023