AbbVie Inc (ABBV)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,524,000 | 8,610,000 | 22,957,000 | 19,759,000 | 14,677,000 |
| Interest expense | US$ in thousands | 2,808,000 | 2,224,000 | 2,230,000 | 2,423,000 | 2,454,000 |
| Interest coverage | 2.32 | 3.87 | 10.29 | 8.15 | 5.98 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $6,524,000K ÷ $2,808,000K
= 2.32
The interest coverage ratio of AbbVie Inc has displayed significant fluctuations over the past five years. In December 31, 2020, the interest coverage ratio stood at 5.98, indicating that the company's operating income was nearly six times higher than its interest expenses. The ratio improved in the subsequent years, reaching 8.15 in December 31, 2021 and further increasing to 10.29 in December 31, 2022, suggesting a strengthening ability to cover interest payments.
However, there was a notable decline in the interest coverage ratio in December 31, 2023, dropping to 3.87, which may signal potential concerns regarding the company's ability to meet its interest obligations from operating earnings alone. This was followed by a further decrease to 2.32 in December 31, 2024, indicating a significant decrease in the company's ability to cover interest expenses.
Overall, the trend in AbbVie Inc's interest coverage ratio shows variability, with periods of improvement followed by declines. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024