AGCO Corporation (AGCO)

Interest coverage is a key financial ratio that measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Analyzing the interest coverage ratio of AGCO Corp. over the past five years reveals a significant improvement in its ability to cover interest expenses. In 2023, the interest coverage ratio surged to 387.96, marking a substantial increase from the previous year's ratio of 105.51. This sharp rise indicates a strengthening financial position and suggests that AGCO Corp. generated a sizeable operating income relative to its interest expenses in 2023.

Comparing it to earlier years, AGCO Corp.'s interest coverage ratio exhibited an upward trend, reflecting improved financial health and a reduced risk of defaulting on debt obligations. The ratios for 2022, 2021, 2020, and 2019 were 105.51, 161.54, 45.66, and 28.95, respectively, demonstrating a consistent enhancement in the company's ability to service its interest payments over the period.

Overall, AGCO Corp.'s interest coverage ratio has shown a remarkable improvement, signaling a strengthened financial position, better operational efficiency, and decreased financial risk. This positive trajectory suggests that the company has been effectively managing its debt and generating sufficient earnings to comfortably meet its interest obligations.

Peer comparison

Dec 31, 2023