WESCO International Inc (WCC)
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 | 1,264,000 | 1,271,000 | 1,287,300 | 1,307,700 | 1,403,000 | 1,475,448 | 1,499,552 | 1,506,066 | 1,431,071 | 1,312,789 | 1,146,671 | 996,831 | 849,984 | 684,212 | 628,298 | 497,913 | 422,768 | 412,882 | 328,094 | 336,755 |
| Interest expense (ttm) | US$ in thousands | 364,800 | 376,700 | 388,700 | 388,700 | 389,300 | 379,565 | 356,122 | 325,822 | 294,442 | 267,567 | 262,230 | 261,320 | 268,073 | 281,993 | 286,813 | 279,806 | 225,905 | 168,168 | 107,934 | 65,003 |
| Interest coverage | 3.46 | 3.37 | 3.31 | 3.36 | 3.60 | 3.89 | 4.21 | 4.62 | 4.86 | 4.91 | 4.37 | 3.81 | 3.17 | 2.43 | 2.19 | 1.78 | 1.87 | 2.46 | 3.04 | 5.18 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,264,000K ÷ $364,800K
= 3.46
Interest coverage ratio is a financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally favorable as it suggests the company has more than enough earnings to cover its interest obligations.
Analyzing WESCO International Inc's interest coverage ratio over the last few quarters, we can see a trend of fluctuation. From March 31, 2020, to December 31, 2021, the interest coverage ratio steadily decreased from 5.18 to 1.87, indicating a declining ability to cover interest expenses with operating income.
However, starting from March 31, 2022, the interest coverage ratio began to improve, reaching a peak of 4.91 on September 30, 2022. This improvement suggests that WESCO International Inc's operating income was more than sufficient to cover its interest expenses during this period.
Subsequently, the interest coverage ratio fluctuated between 3.36 and 4.37 from March 31, 2023, to June 30, 2024. Although there were some fluctuations, the ratios remained relatively stable, indicating a reasonable ability to cover interest expenses with operating income.
Overall, while there were periods of decline in the interest coverage ratio for WESCO International Inc, the recent trend shows an improvement in the company's ability to cover its interest expenses with operating income. It is important for investors and stakeholders to monitor this ratio to assess the company's financial health and its capacity to meet its debt obligations.
Peer comparison
Dec 31, 2024