Titan International Inc (TWI)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	39,281	53,981	78,572	99,597	128,533	163,510	196,578	245,121	232,149	225,969	188,553	101,087	83,261	46,978	17,972	5,774	-37,260	-43,639	-48,558	-46,359
Interest expense (ttm)	US$ in thousands	31,010	24,284	19,210	17,785	18,785	23,146	26,436	28,381	29,796	31,117	31,714	32,605	32,221	31,417	30,850	30,260	30,772	31,846	32,952	33,239
Interest coverage		1.27	2.22	4.09	5.60	6.84	7.06	7.44	8.64	7.79	7.26	5.95	3.10	2.58	1.50	0.58	0.19	-1.21	-1.37	-1.47	-1.39

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $39,281K ÷ $31,010K
= 1.27

Interest coverage ratio is a financial metric that assesses a company's ability to meet its interest payment obligations on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expenses.

For Titan International Inc, the interest coverage ratio has shown a significant improvement over the period from March 31, 2020, to December 31, 2024. The company experienced negative interest coverage ratios in the early part of the period, indicating that its earnings were insufficient to cover its interest expenses. However, starting from March 31, 2021, the interest coverage ratio became positive and began to increase steadily.

By the end of December 31, 2024, Titan International Inc had an interest coverage ratio of 1.27, which signifies that the company's earnings were 1.27 times its interest expenses. While the trend has been positive overall, it is important to note that the ratio is still relatively low, indicating that the company may have limited financial flexibility in meeting its interest obligations.

Further monitoring of Titan International Inc's interest coverage ratio will be essential to assess its ability to generate earnings to cover its interest expenses and manage its debt effectively. It is recommended for the company to continue improving its profitability and financial performance to strengthen its financial position in the long run.