Xylem Inc (XYL)
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 | 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 | 488,000 | 666,000 | 663,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 71,000 | 76,000 | 79,000 |
| Interest coverage | 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 | 6.87 | 8.76 | 8.39 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $684,000K ÷ $49,000K
= 13.96
The interest coverage ratio for Xylem Inc has shown a generally positive trend over the quarters provided. It increased from 8.29 in Q1 2022 to 22.63 in Q1 2023, indicating the company's ability to comfortably meet its interest obligations with its operating income. The peak interest coverage ratio of 22.63 in Q1 2023 suggests that Xylem Inc's earnings before interest and taxes were more than sufficient to cover its interest expenses during that period. This improvement in the interest coverage ratio could signify better financial health and reduced risk of default due to the company's ability to generate substantial earnings compared to its interest expenses. Continuing to monitor this ratio will be important to assess Xylem Inc's ability to meet its debt obligations in the long term.
Peer comparison
Dec 31, 2023