Archer-Daniels-Midland Company (ADM)
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 | 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 | 1,801,000 | 1,921,000 | 2,282,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 404,000 | 394,000 | 374,000 |
| Interest coverage | 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 | 4.46 | 4.88 | 6.10 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,958,000K ÷ $647,000K
= 7.66
Archer-Daniels-Midland Company's interest coverage has shown a generally improving trend over the past five years, indicating a strengthening ability to cover its interest expenses with operating income. The interest coverage ratio has consistently exceeded 1, reflecting that the company's operating income is more than sufficient to cover its interest obligations.
The company's interest coverage ratio has fluctuated over the last two years, reaching a peak of approximately 15.74 in September 2022, which suggests a favorable ability to meet interest payments. However, there was a slight decline in interest coverage in the last quarter of 2023, but the ratio remained healthy at 7.66, indicating that the company still has a comfortable buffer to cover its interest expenses.
Overall, Archer-Daniels-Midland Company's interest coverage ratio demonstrates a solid financial position and ability to service its debt obligations, providing investors and creditors with confidence in the company's financial stability.
Peer comparison
Dec 31, 2023