Archer-Daniels-Midland Company (ADM)
Interest coverage
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,053,000 | 3,954,000 | 4,477,000 | 4,958,000 | 5,378,000 | 5,516,000 | 5,793,000 | 5,604,000 | 5,335,000 | 4,721,000 | 3,998,000 | 3,552,000 | 3,298,000 | 2,890,000 | 2,661,000 | 2,212,000 | 1,989,000 | 2,289,000 | 2,033,000 | 1,990,000 |
| Interest expense (ttm) | US$ in thousands | 692,000 | 673,000 | 666,000 | 647,000 | 616,000 | 558,000 | 451,000 | 396,000 | 339,000 | 303,000 | 270,000 | 265,000 | 257,000 | 296,000 | 343,000 | 339,000 | 365,000 | 362,000 | 384,000 | 402,000 |
| Interest coverage | 4.41 | 5.88 | 6.72 | 7.66 | 8.73 | 9.89 | 12.84 | 14.15 | 15.74 | 15.58 | 14.81 | 13.40 | 12.83 | 9.76 | 7.76 | 6.53 | 5.45 | 6.32 | 5.29 | 4.95 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,053,000K ÷ $692,000K
= 4.41
Archer-Daniels-Midland Company's interest coverage ratio has shown a generally positive trend over the past few quarters, indicating the company's ability to comfortably meet its interest payment obligations. The interest coverage ratio has consistently increased from 4.95 in December 2019 to a peak of 15.74 in September 2022, reflecting a strong ability to cover interest expenses with operating income.
The company's interest coverage ratio remained above 10 for several quarters, indicating a healthy financial position and a reduced risk of default. However, there was a slight decrease in the ratio towards the more recent periods, with a value of 4.41 in September 2024. Although the ratio is still above 1, suggesting the company's earnings are sufficient to cover interest expenses, the declining trend should be monitored closely.
Overall, Archer-Daniels-Midland Company has demonstrated a solid ability to generate earnings relative to its interest obligations, but investors and stakeholders should continue to assess the company's financial performance and monitor any future changes in the interest coverage ratio.
Peer comparison
Sep 30, 2024