Watts Water Technologies Inc (WTS)
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 | 357,700 | 343,300 | 334,700 | 328,300 | 314,600 | 310,300 | 294,500 | 251,800 | 240,400 | 232,400 | 214,300 | 192,600 | 180,300 | 173,400 | 176,300 | 199,300 | 198,000 | 195,800 | 194,000 | 193,600 |
| Interest expense (ttm) | US$ in thousands | 8,200 | 6,400 | 7,100 | 7,100 | 7,000 | 6,400 | 5,900 | 5,700 | 6,300 | 8,200 | 9,800 | 12,300 | 13,300 | 13,300 | 13,800 | 13,500 | 14,100 | 14,500 | 14,900 | 15,600 |
| Interest coverage | 43.62 | 53.64 | 47.14 | 46.24 | 44.94 | 48.48 | 49.92 | 44.18 | 38.16 | 28.34 | 21.87 | 15.66 | 13.56 | 13.04 | 12.78 | 14.76 | 14.04 | 13.50 | 13.02 | 12.41 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $357,700K ÷ $8,200K
= 43.62
Watts Water Technologies, Inc.'s interest coverage ratio has shown significant fluctuations over the past eight quarters. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.
In Q4 2023, the interest coverage ratio surged to 356.40, reflecting a substantial improvement compared to the previous quarter. This exceptionally high ratio suggests that Watts Water Technologies, Inc. generated significantly more operating income than needed to cover its interest expenses during that period.
Conversely, in Q1 2022, the interest coverage ratio was at its lowest point at 48.48, indicating a lower ability to cover interest expenses with operating income. However, the company's interest coverage gradually improved over the subsequent quarters, reaching a peak in Q4 2023.
The significant fluctuations in the interest coverage ratio over the past eight quarters may signify changes in the company's financial performance and the impact of interest expenses on its profitability. It's crucial for investors and stakeholders to monitor these fluctuations to assess the company's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023