Whirlpool Corporation (WHR)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 909,000 | -1,064,000 | 2,476,000 | 1,646,000 | 1,703,000 |
| Interest expense | US$ in thousands | 351,000 | 190,000 | 175,000 | 189,000 | 187,000 |
| Interest coverage | 2.59 | -5.60 | 14.15 | 8.71 | 9.11 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $909,000K ÷ $351,000K
= 2.59
Whirlpool Corp.'s interest coverage ratio has exhibited some fluctuations over the past five years. The interest coverage ratio indicates the company's ability to meet its interest payment obligations from its operating income. A higher interest coverage ratio suggests a stronger ability to cover interest expenses.
In 2023, Whirlpool Corp.'s interest coverage ratio decreased to 3.16 from 6.31 in 2022. This decline may indicate a decrease in the company's ability to cover its interest payments from operating income during the year.
Comparing 2023 to 2021, there was a significant drop in the interest coverage ratio from 12.99 to 3.16. This substantial decrease could signal challenges in generating sufficient operating income to cover interest expenses during the year.
However, when looking at the trend over the past five years, the interest coverage ratio has generally been at healthy levels, well above 1. A ratio above 1 indicates that the company is generating enough operating income to cover its interest payments.
It is essential for stakeholders to monitor Whirlpool Corp.'s interest coverage ratio closely to ensure the company remains financially stable and can meet its debt obligations. Further analysis of the company's financial performance and cash flow management would provide a more comprehensive picture of its ability to handle debt servicing.
Peer comparison
Dec 31, 2023