Vontier Corp (VNT)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 543,400 | 553,400 | 561,000 | 576,900 | 577,900 | 582,400 | 599,600 | 584,100 | 582,200 |
| Interest expense (ttm) | US$ in thousands | 94,700 | 67,900 | 67,800 | 67,600 | 67,500 | 37,000 | 37,100 | 37,200 | 37,100 |
| Interest coverage | 5.74 | 8.15 | 8.27 | 8.53 | 8.56 | 15.74 | 16.16 | 15.70 | 15.69 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $543,400K ÷ $94,700K
= 5.74
To analyze Vontier Corporation's interest coverage, we observe a declining trend over the quarters, from 11.61 in Q1 2022 to 5.80 in Q4 2023. This suggests that the company's ability to cover its interest expenses with operating profits has weakened over time. A lower interest coverage ratio indicates higher financial risk, as the company may struggle to meet its interest obligations.
The decreasing trend could be due to various reasons such as declining operating profits, increasing interest expenses, or a combination of both. Investors and creditors may view this trend negatively, as it indicates potential challenges in servicing debt obligations in the future. It would be essential for the company to closely monitor and manage its interest coverage ratio to ensure financial stability and avoid any potential liquidity issues.
Peer comparison
Dec 31, 2023