AbbVie Inc (ABBV)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 9,768,000 | 15,884,000 | 15,503,000 | 15,446,000 | 15,635,000 | 17,189,000 | 19,746,000 | 20,542,000 | 22,087,000 | 22,774,000 | 22,653,000 | 21,647,000 | 20,891,000 | 20,410,000 | 19,048,000 | 16,515,000 | 15,699,000 | 12,676,000 | 12,822,000 | 14,153,000 |
| Interest expense (ttm) | US$ in thousands | 2,679,000 | 2,541,000 | 2,505,000 | 2,331,000 | 2,224,000 | 2,226,000 | 2,231,000 | 2,235,000 | 2,230,000 | 2,244,000 | 2,280,000 | 2,339,000 | 2,423,000 | 2,472,000 | 2,506,000 | 2,523,000 | 2,454,000 | 2,384,000 | 2,234,000 | 1,960,000 |
| Interest coverage | 3.65 | 6.25 | 6.19 | 6.63 | 7.03 | 7.72 | 8.85 | 9.19 | 9.90 | 10.15 | 9.94 | 9.25 | 8.62 | 8.26 | 7.60 | 6.55 | 6.40 | 5.32 | 5.74 | 7.22 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $9,768,000K ÷ $2,679,000K
= 3.65
AbbVie Inc's interest coverage ratio has shown fluctuations over the period in consideration from March 31, 2020, to December 31, 2024. The interest coverage ratio indicates the company's ability to meet its interest payment obligations using its earnings before interest and taxes.
At the beginning of the period, the interest coverage ratio was 7.22 on March 31, 2020, which means the company earned 7.22 times the interest it owed. This ratio decreased to 5.32 by September 30, 2020, indicating a potential decrease in the company's ability to meet its interest obligations.
However, from December 31, 2020, the interest coverage ratio started to show an improving trend, reaching a peak of 10.15 on September 30, 2022. This demonstrates an enhanced ability to cover interest expenses using operating profits.
Despite the fluctuations, the company managed to maintain its interest coverage ratio above 1 during the period, indicating that AbbVie Inc generated enough earnings to cover its interest expenses. It is important to note that a higher interest coverage ratio is generally seen as favorable as it suggests a lower risk of default on debt obligations.
The most recent data as of December 31, 2024, shows a slight decrease in the interest coverage ratio to 3.65, signaling a potential tighter ability to cover interest payments using current earnings. It would be essential for stakeholders to monitor this trend to understand the reasons behind the decline and assess the company's financial health and liquidity position.
Peer comparison
Dec 31, 2024