Waste Management Inc (WM)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 2,706,000 | 2,818,000 | 2,783,000 | 2,802,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 411,000 | 398,000 | 386,000 | 379,000 |
| Interest coverage | 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 | 6.58 | 7.08 | 7.21 | 7.39 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,575,000K ÷ $500,000K
= 7.15
Interest coverage measures the ability of Waste Management, Inc. to meet its interest obligations on its debt with its operating profits. The trend in interest coverage over the past eight quarters shows a gradual decline from 9.34 in Q3 2022 to 7.53 in Q4 2023. Although the company's interest coverage ratio remains above 1, indicating that it generates enough operating income to cover its interest expenses, the downward trend raises some concerns. A decreasing interest coverage ratio could suggest that the company is becoming less capable of servicing its debt obligations from its earnings. It would be prudent for stakeholders to monitor this trend closely to ensure the company's financial health and ability to manage its debt levels effectively.
Peer comparison
Dec 31, 2023