Zurn Elkay Water Solutions Corporation (ZWS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 193,800 | 115,400 | 158,300 | 241,100 | 157,600 |
| Interest expense | US$ in thousands | 38,500 | 26,900 | 34,700 | 56,600 | 69,900 |
| Interest coverage | 5.03 | 4.29 | 4.56 | 4.26 | 2.25 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $193,800K ÷ $38,500K
= 5.03
The interest coverage of Zurn Elkay Water Solutions Corporation has shown a generally positive trend over the past five years, indicating the company's improving ability to cover its interest expenses with its operating income. The interest coverage ratio has increased from 2.25 in March 2019 to 5.03 in December 2023, reflecting a strengthening financial position.
This improvement suggests that the company's earnings before interest and taxes (EBIT) are more than sufficient to cover its interest payments, which is a positive sign for creditors and investors. A higher interest coverage ratio is generally indicative of lower financial risk and greater financial stability for the company.
Overall, the upward trend in Zurn Elkay Water Solutions Corporation's interest coverage ratio over the years demonstrates the company's enhanced capacity to meet its interest obligations and signifies a healthier financial position.
Peer comparison
Dec 31, 2023