Abbott Laboratories (ABT)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 7,301,000 | 6,821,000 | 6,883,000 | 7,572,000 | 8,864,000 | 9,848,000 | 10,575,000 | 9,573,000 | 8,744,000 | 8,814,000 | 7,746,000 | 6,924,000 | 5,538,000 | 4,414,000 | 4,126,000 | 4,736,000 | 4,747,000 | 4,475,000 | 4,137,000 | 3,869,000 |
| Interest expense (ttm) | US$ in thousands | 637,000 | 632,000 | 607,000 | 580,000 | 558,000 | 535,000 | 527,000 | 529,000 | 533,000 | 538,000 | 542,000 | 542,000 | 546,000 | 574,000 | 604,000 | 638,000 | 670,000 | 692,000 | 728,000 | 770,000 |
| Interest coverage | 11.46 | 10.79 | 11.34 | 13.06 | 15.89 | 18.41 | 20.07 | 18.10 | 16.41 | 16.38 | 14.29 | 12.77 | 10.14 | 7.69 | 6.83 | 7.42 | 7.09 | 6.47 | 5.68 | 5.02 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $7,301,000K ÷ $637,000K
= 11.46
The interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. A higher interest coverage ratio indicates the company is more capable of servicing its debt.
Based on the data provided, Abbott Laboratories has shown consistency in its interest coverage ratio over the quarters, with values ranging from 19.11 to 25.71.
The increasing trend of the interest coverage ratio from 19.11 in Q1 2022 to 25.71 in Q4 2023 reflects that Abbott Laboratories has been generating more operating income relative to its interest expenses. This indicates a strong ability to meet interest payments.
The company's interest coverage ratio consistently above 20 implies that Abbott Laboratories has a strong ability to cover its interest expenses with its operating income. This signifies financial stability and a lower risk of default on debt obligations.
Overall, Abbott Laboratories' interest coverage ratio suggests a healthy financial position and the company's capability to manage its debt obligations effectively. It is important to continue monitoring this ratio in the future to ensure financial health and stability.
Peer comparison
Dec 31, 2023