Waste Management Inc (WM)
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 | 4,063,000 | 3,929,000 | 3,831,000 | 3,766,000 | 3,575,000 | 3,555,000 | 3,476,000 | 3,422,000 | 3,365,000 | 3,318,000 | 3,182,000 | 3,083,000 | 2,965,000 | 2,901,000 | 2,775,000 | 2,511,000 | 2,434,000 | 2,435,000 | 2,489,000 | 2,658,000 |
| Interest expense (ttm) | US$ in thousands | 196,000 | 525,000 | 521,000 | 510,000 | 500,000 | 481,000 | 445,000 | 413,000 | 378,000 | 352,000 | 348,000 | 353,000 | 365,000 | 379,000 | 389,000 | 410,000 | 425,000 | 438,000 | 446,000 | 427,000 |
| Interest coverage | 20.73 | 7.48 | 7.35 | 7.38 | 7.15 | 7.39 | 7.81 | 8.29 | 8.90 | 9.43 | 9.14 | 8.73 | 8.12 | 7.65 | 7.13 | 6.12 | 5.73 | 5.56 | 5.58 | 6.22 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,063,000K ÷ $196,000K
= 20.73
Waste Management Inc's interest coverage ratio has shown a generally positive trend over the past few years, indicating the company's ability to comfortably meet its interest payment obligations. The ratio has consistently been above 5, which is typically considered a healthy level, and has shown an increasing trend from 6.22 as of March 31, 2020, to a peak of 20.73 as of December 31, 2024.
This improvement in interest coverage suggests that Waste Management Inc has been generating sufficient earnings to cover its interest expenses, providing a buffer against potential financial risks. However, it is important to note that the significant spike in the interest coverage ratio to 20.73 as of December 31, 2024 may be an anomaly and might warrant further investigation to understand the reasons behind this unusual increase. Overall, Waste Management Inc's interest coverage ratio reflects a solid financial position and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2024