Waters Corporation (WAT)

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	826,353	798,313	766,607	777,354	817,676	839,736	852,320	852,093	873,395	849,312	849,117	845,907	821,707	823,218	788,748	747,218	644,520	617,226	632,620	655,040
Interest expense (ttm)	US$ in thousands	89,677	101,384	110,391	109,937	98,861	82,057	64,035	52,182	46,683	43,668	42,329	42,937	44,938	45,112	40,939	37,927	37,024	40,189	41,282	37,844
Interest coverage		9.21	7.87	6.94	7.07	8.27	10.23	13.31	16.33	18.71	19.45	20.06	19.70	18.29	18.25	19.27	19.70	17.41	15.36	15.32	17.31

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $826,353K ÷ $89,677K
= 9.21

The interest coverage ratio for Waters Corporation has exhibited a generally positive trend from March 2020 to December 2021, indicating the company's ability to meet its interest obligations comfortably. The ratio ranged from approximately 15.32 to 19.70 during this period, reflecting the company's strong earnings relative to its interest expenses.

However, starting from March 2022, there was a slight decline in the interest coverage ratio, hovering around the range of 16.33 to 20.06 until September 2022. This suggests that while the company's earnings continued to cover its interest payments adequately, the margin of safety may have slightly decreased.

From December 2022 to December 2024, there was a more noticeable decrease in the interest coverage ratio, dropping to as low as 6.94 in June 2024. This significant decline indicates a potential strain on Waters Corporation's ability to cover its interest expenses with its earnings. It would be important for investors and stakeholders to monitor this trend closely, as a declining interest coverage ratio could indicate potential financial distress or increased financial risk for the company in meeting its debt obligations.