The Boeing Company (BA)
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 | -10,707,000 | -773,000 | -3,547,000 | -2,902,000 | -12,767,000 |
| Interest expense | US$ in thousands | 2,874,000 | 2,560,000 | 2,650,000 | 2,790,000 | 2,280,000 |
| Interest coverage | -3.73 | -0.30 | -1.34 | -1.04 | -5.60 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-10,707,000K ÷ $2,874,000K
= -3.73
The interest coverage ratio of The Boeing Company has been consistently negative over the past five years, indicating a concerning trend. A negative interest coverage ratio means that the company did not generate sufficient operating income to cover its interest expenses during those periods.
In particular, as of December 31, 2020, the interest coverage ratio was reported at -5.60, highlighting a substantial shortfall in the ability of Boeing to meet its interest obligations. The situation did not improve significantly in the subsequent years, as the ratios for December 31, 2021, December 31, 2022, December 31, 2023, and December 31, 2024 were -1.04, -1.34, -0.30, and -3.73 respectively.
This persistent negative trend in interest coverage raises concerns about The Boeing Company's financial health and ability to service its debt obligations. Investors and creditors may view such consistently low interest coverage ratios as a red flag, indicating potential financial distress and increased risk associated with investing in or lending to the company. It is imperative for Boeing to manage its operational performance, improve profitability, and effectively address its interest coverage challenges to enhance its financial sustainability in the long term.
Peer comparison
Dec 31, 2024