Trane Technologies plc (TT)
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 | 2,756,900 | 2,665,500 | 2,532,200 | 2,416,600 | 2,356,000 | 2,226,800 | 2,078,600 | 2,023,600 | 1,990,600 | 1,930,300 | 1,923,000 | 1,659,800 | 1,400,400 | 1,426,900 | 1,477,200 | 1,706,100 | 1,892,300 | 1,865,100 | 1,824,400 | 1,838,300 |
| Interest expense (ttm) | US$ in thousands | 234,500 | 233,000 | 230,900 | 225,200 | 223,600 | 223,700 | 225,600 | 229,000 | 233,700 | 239,600 | 244,300 | 246,300 | 248,700 | 250,200 | 251,700 | 254,900 | 242,800 | 228,700 | 213,300 | 199,100 |
| Interest coverage | 11.76 | 11.44 | 10.97 | 10.73 | 10.54 | 9.95 | 9.21 | 8.84 | 8.52 | 8.06 | 7.87 | 6.74 | 5.63 | 5.70 | 5.87 | 6.69 | 7.79 | 8.16 | 8.55 | 9.23 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,756,900K ÷ $234,500K
= 11.76
The interest coverage ratio of Trane Technologies plc has been consistently increasing over the past eight quarters, indicating the company's ability to comfortably meet its interest payment obligations. The ratio has improved from 9.16 in Q1 2022 to 13.21 in Q4 2023. This upward trend suggests that Trane Technologies plc has been generating sufficient earnings to cover its interest expenses with a sizable margin of safety. The company's solid interest coverage ratio reflects its strong financial health and indicates a lower risk of default on its debt obligations.