Aptiv PLC (APTV)
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 | 2,347,000 | 1,295,000 | 934,000 | 841,000 | 2,017,000 |
| Interest expense | US$ in thousands | 337,000 | 285,000 | 219,000 | 150,000 | 164,000 |
| Interest coverage | 6.96 | 4.54 | 4.26 | 5.61 | 12.30 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,347,000K ÷ $337,000K
= 6.96
The interest coverage ratio of Aptiv PLC has shown a gradual decline over the years, indicating a decrease in the company's ability to cover its interest expenses with its operating income.
In 2020, the interest coverage ratio was relatively strong at 12.30, reflecting a comfortable ability to cover interest payments. However, this ratio decreased to 5.61 in 2021, signifying a reduction in the company's ability to meet its interest obligations.
The trend continued as the interest coverage ratio further declined to 4.26 in 2022 and then slightly improved to 4.54 in 2023. Despite the slight improvement, the ratio remained below the levels seen in previous years.
By the end of 2024, the interest coverage ratio had increased to 6.96, showing a positive sign of recovery but still below the levels observed in earlier periods.
Overall, Aptiv PLC's interest coverage has experienced fluctuations over the years, indicating changes in the company's ability to meet its interest payments with its operational earnings. It is crucial for the company to monitor this ratio closely to ensure sustainable financial health and effective management of its debt obligations.
Peer comparison
Dec 31, 2024