Abbott Laboratories (ABT)

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	7,616,000	7,362,000	9,113,000	9,204,000	5,462,000
Interest expense	US$ in thousands	559,000	637,000	375,000	490,000	500,000
Interest coverage		13.62	11.56	24.30	18.78	10.92

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $7,616,000K ÷ $559,000K
= 13.62

To analyze Abbott Laboratories' interest coverage based on the provided data, we calculate the interest coverage ratio, which is obtained by dividing earnings before interest and taxes (EBIT) by the interest expense. The interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings.

1. December 31, 2020: The interest coverage ratio was 10.92, suggesting that Abbott Laboratories was generating earnings 10.92 times higher than its interest expenses during that period.

2. December 31, 2021: The interest coverage ratio improved to 18.78, indicating a stronger ability to cover interest payments with its earnings.

3. December 31, 2022: The interest coverage ratio further increased to 24.30, demonstrating a significant enhancement in the company's ability to meet its interest obligations comfortably.

4. December 31, 2023: The interest coverage ratio declined to 11.56, indicating a slight decrease in the company's ability to cover interest expenses compared to the previous year.

5. December 31, 2024: The interest coverage ratio further decreased to 13.62, suggesting a continued but moderate decline in Abbott Laboratories' ability to cover interest payments with its earnings.

Overall, Abbott Laboratories has shown a generally strong ability to cover its interest expenses over the years, with fluctuations observed in the interest coverage ratio. The significant improvements in the interest coverage ratio in 2021 and 2022 indicate a positive trend in the company's financial performance, although some fluctuations were observed in subsequent years. It is important for investors and stakeholders to monitor these ratios to assess the company's financial health and debt repayment capacity.