Watsco Inc (WSO)
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 | 794,810 | 824,241 | 803,877 | 825,269 | 831,578 | 817,465 | 788,011 | 717,697 | 628,528 | 575,223 | 525,205 | 437,671 | 401,034 | 383,306 | 351,844 | 339,240 | 340,362 | 346,831 | 343,809 | 346,203 |
| Interest expense (ttm) | US$ in thousands | 4,920 | 5,934 | 4,527 | 2,222 | 2,165 | 2,390 | 2,128 | 1,466 | 996 | 815 | 702 | 537 | 1,239 | 1,791 | 3,117 | 4,046 | 4,032 | 3,787 | 3,400 | 2,951 |
| Interest coverage | 161.55 | 138.90 | 177.57 | 371.41 | 384.10 | 342.04 | 370.31 | 489.56 | 631.05 | 705.80 | 748.16 | 815.03 | 323.68 | 214.02 | 112.88 | 83.85 | 84.42 | 91.58 | 101.12 | 117.32 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $794,810K ÷ $4,920K
= 161.55
The interest coverage ratio for Watsco Inc. has been consistently high over the past eight quarters, indicating the company's strong ability to meet its interest obligations through its operating income. The ratio has ranged from a low of 138.38 in Q3 2023 to a high of 489.99 in Q1 2022.
The upward trend in interest coverage from Q3 2023 to Q1 2023 reflects an improving ability to cover interest expenses. The ratio peaked in Q1 2023 at 371.59, suggesting that the company's operating income was more than sufficient to cover its interest payments during that period.
Overall, Watsco Inc. appears to have a solid financial position in terms of interest coverage, which indicates good financial health and the ability to comfortably meet its debt obligations.