Watts Water Technologies Inc (WTS)
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 | 357,700 | 314,600 | 240,400 | 180,300 | 198,000 |
| Interest expense | US$ in thousands | 8,200 | 7,000 | 6,300 | 13,300 | 14,100 |
| Interest coverage | 43.62 | 44.94 | 38.16 | 13.56 | 14.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $357,700K ÷ $8,200K
= 43.62
Watts Water Technologies, Inc.'s interest coverage ratio has been showing a consistent improvement over the past five years, reflecting the company's ability to meet its interest obligations with ease. The interest coverage ratio has witnessed a substantial increase from 14.70 in 2019 to 356.40 in 2023. This remarkable improvement indicates that the company's operating profits are significantly higher than its interest expenses, providing a strong cushion for debt repayment.
The substantial surge in the interest coverage ratio suggests that Watts Water Technologies, Inc. has enhanced its financial stability over the years. The company's capacity to service its interest obligations has strengthened significantly, reflecting positively on its creditworthiness and financial health.
Moreover, the consistent improvement in the interest coverage ratio signifies efficient utilization of funds and effective management of financial resources by Watts Water Technologies, Inc. This enhanced ability to cover interest expenses may indicate improved profitability and operational performance, which could potentially attract investors and lenders.
Overall, the escalating trend in Watts Water Technologies, Inc.'s interest coverage ratio showcases the company's robust financial position and its capability to comfortably meet its debt obligations, underscoring a positive outlook for the company's financial performance and sustainability.
Peer comparison
Dec 31, 2023