Woodward Inc (WWD)
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 | 401,931 | 323,666 | 281,168 | 222,075 | 231,282 | 234,443 | 236,925 | 245,200 | 269,643 | 280,081 | 287,748 | 274,406 | 303,625 | 317,692 | 326,725 | 376,084 | 361,777 | 364,613 | 369,894 | 331,255 |
| Interest expense (ttm) | US$ in thousands | 48,192 | 47,898 | 45,671 | 42,029 | 37,381 | 34,545 | 33,766 | 33,630 | 33,682 | 34,282 | 34,861 | 35,201 | 35,708 | 35,811 | 36,347 | 38,408 | 41,132 | 44,001 | 46,870 | 46,128 |
| Interest coverage | 8.34 | 6.76 | 6.16 | 5.28 | 6.19 | 6.79 | 7.02 | 7.29 | 8.01 | 8.17 | 8.25 | 7.80 | 8.50 | 8.87 | 8.99 | 9.79 | 8.80 | 8.29 | 7.89 | 7.18 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $401,931K ÷ $48,192K
= 8.34
Woodward Inc's interest coverage ratio has shown variability over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations on its outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
In Q1 2024, the interest coverage ratio was at 8.64, indicating that Woodward Inc generated 8.64 times more operating income than needed to cover its interest expenses for that quarter. This suggests a robust financial position and increased profitability compared to previous quarters.
The trend in interest coverage shows fluctuation, with Q2 and Q3 2023 experiencing lower ratios than Q1 and Q4 of the same year. Q2 2023 had the lowest interest coverage ratio of 5.27, signaling a potential decrease in the company's ability to service its debt.
Overall, Woodward Inc's interest coverage ratio has been relatively healthy, consistently above 5. This indicates that the company has generally been able to meet its interest payment obligations comfortably. However, investors and creditors may still want to monitor the trend in interest coverage to ensure the company maintains sufficient earnings to cover its interest expenses in the long term.