A.O. Smith (BSP:A1OS34) Interest Coverage : 167.99 (As of Dec. 2023)

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What is A.O. Smith Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. A.O. Smith's Operating Income for the three months ended in Dec. 2023 was R$905 Mil. A.O. Smith's Interest Expense for the three months ended in Dec. 2023 was R$-5 Mil. A.O. Smith's interest coverage for the quarter that ended in Dec. 2023 was 167.99. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. A.O. Smith Corp has enough cash to cover all of its debt. Its financial situation is stable.

The historical rank and industry rank for A.O. Smith's Interest Coverage or its related term are showing as below:

BSP:A1OS34' s Interest Coverage Range Over the Past 10 Years
Min: 42.28 Med: 61.62 Max: 141.74
Current: 63.12

BSP:A1OS34's Interest Coverage is ranked better than
76.61% of 2304 companies
in the Industrial Products industry
Industry Median: 13.775 vs BSP:A1OS34: 63.12

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

A.O. Smith Interest Coverage Historical Data

The historical data trend for A.O. Smith's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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A.O. Smith Interest Coverage Chart

A.O. Smith Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

Get a 7-Day Free Trial

42.28

61.36

141.74

70.07

63.12

A.O. Smith Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															52.85	46.73	45.42	75.54	167.99

Competitive Comparison of A.O. Smith's Interest Coverage

For the Specialty Industrial Machinery subindustry, A.O. Smith's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

A.O. Smith's Interest Coverage Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, A.O. Smith's Interest Coverage distribution charts can be found below:

* The bar in red indicates where A.O. Smith's Interest Coverage falls into.

A.O. Smith Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

A.O. Smith's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, A.O. Smith's Interest Expense was R$-59 Mil. Its Operating Income was R$3,711 Mil. And its Long-Term Debt & Capital Lease Obligation was R$711 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	3711.109	/	-58.798
	=	63.12

A.O. Smith's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, A.O. Smith's Interest Expense was R$-5 Mil. Its Operating Income was R$905 Mil. And its Long-Term Debt & Capital Lease Obligation was R$711 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	905.483	/	-5.39
	=	167.99

The higher the ratio, the stronger the company's Financial Strength is.

A.O. Smith (BSP:A1OS34) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

A.O. Smith Interest Coverage Related Terms

Thank you for viewing the detailed overview of A.O. Smith's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

A.O. Smith (BSP:A1OS34) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » A.O. Smith Corp (BSP:A1OS34) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

AOS:USA 3SM:Germany

Address

11270 West Park Place, P. O. Box 245008, Suite 170, Milwaukee, WI, USA, 53224-9508

Website

https://www.aosmith.com

A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Supplementary products include water heating equipment, condensing and noncondensing boilers, and water system tanks. The company's two operating segments are by geographic region: North America (majority of total revenue) and the Rest of the World. A material portion of sales in North America derive from replacing existing products, and the company utilizes a wholesale distribution channel and multiple selling locations. The Rest of the World segment sells majorly in Asian countries and operates sales offices to expand distribution and market its product portfolio.

A.O. Smith (BSP:A1OS34) Headlines

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