West Pharmaceutical Services Inc (WST)
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 | 724,700 | 708,500 | 777,200 | 426,900 | 309,200 |
| Interest expense | US$ in thousands | 9,000 | 7,900 | 8,200 | 8,200 | 8,500 |
| Interest coverage | 80.52 | 89.68 | 94.78 | 52.06 | 36.38 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $724,700K ÷ $9,000K
= 80.52
The interest coverage ratio for West Pharmaceutical Services, Inc. has shown a favorable trend over the past five years. In 2022, the interest coverage ratio was at a high of 279.11, indicating that the company generated significant earnings compared to its interest expenses, providing a strong buffer to meet its interest obligations. This improvement from the previous year suggests that the company's earnings were more than sufficient to cover its interest payments.
In 2021, the interest coverage ratio was 108.50, indicating a healthy ability to cover interest expenses. This was an improvement from 2020 when the ratio was 64.29, showing an increase in the company's ability to meet its interest obligations. The consistent ability to cover interest payments suggests the company has a stable financial position.
Looking further back, in 2019, the interest coverage ratio was 64.47, similar to 2020, indicating a consistent performance in meeting interest payments relative to earnings.
Overall, the trend in the interest coverage ratio for West Pharmaceutical Services, Inc. demonstrates a strong financial position and efficient management of interest expenses, with increasing earnings supporting its ability to cover interest payments comfortably.
Peer comparison
Dec 31, 2023