Xylem Inc (XYL)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 980,000 912,000 759,000 684,000 662,000 492,000 514,000 490,000 427,000 552,000 563,000 587,000 627,000 545,000 439,000 362,000 376,000 308,000 429,000 483,000
Interest expense (ttm) US$ in thousands 47,000 52,000 54,000 49,000 48,000 46,000 46,000 50,000 50,000 59,000 68,000 76,000 84,000 85,000 82,000 77,000 71,000 65,000 65,000 67,000
Interest coverage 20.85 17.54 14.06 13.96 13.79 10.70 11.17 9.80 8.54 9.36 8.28 7.72 7.46 6.41 5.35 4.70 5.30 4.74 6.60 7.21

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $980,000K ÷ $47,000K
= 20.85

Xylem Inc's interest coverage ratio has shown a fluctuating trend over the past few years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt.

From December 31, 2019, to September 30, 2021, the interest coverage ratio ranged between 4.70 and 7.46, indicating that the company was able to comfortably cover its interest expenses with its earnings during this period.

However, from December 31, 2021, to December 31, 2024, the interest coverage ratio improved significantly, reaching a peak of 20.85 as of December 31, 2024. This indicates that Xylem Inc's earnings have been increasing at a faster rate than its interest expenses, which is a positive sign for the company's financial health.

Overall, the trend in Xylem Inc's interest coverage ratio shows an improving ability to cover its interest payments, which suggests a strengthening financial position and reduced financial risk in terms of debt obligations.