Ball Corporation (BALL)
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 | 1,273,000 | 1,161,000 | 1,359,000 | 931,000 | 1,214,000 | 1,406,000 | 1,121,000 | 1,601,000 | 1,291,000 | 1,207,000 | 1,343,000 | 1,148,000 | 1,003,000 | 913,000 | 737,000 | 866,000 | 932,000 | 924,000 | 994,000 | 930,000 |
| Interest expense (ttm) | US$ in thousands | 484,000 | 456,000 | 413,000 | 366,000 | 322,000 | 285,000 | 274,000 | 272,000 | 270,000 | 270,000 | 270,000 | 271,000 | 275,000 | 286,000 | 297,000 | 311,000 | 317,000 | 312,000 | 309,000 | 305,000 |
| Interest coverage | 2.63 | 2.55 | 3.29 | 2.54 | 3.77 | 4.93 | 4.09 | 5.89 | 4.78 | 4.47 | 4.97 | 4.24 | 3.65 | 3.19 | 2.48 | 2.78 | 2.94 | 2.96 | 3.22 | 3.05 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,273,000K ÷ $484,000K
= 2.63
The interest coverage ratio measures a company's ability to cover its interest payments with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Looking at Ball Corp.'s interest coverage ratio over the past eight quarters, we observe a declining trend. In Q4 2023, the ratio was 3.15, lower than the previous quarter's ratio of 2.88. Despite this decrease, the company's interest coverage remains above 1, indicating that it is still generating sufficient operating income to cover its interest expenses.
Comparing the latest ratio to the same period a year ago, we see a more substantial decline. In Q4 2022, Ball Corp. had an interest coverage ratio of 4.14, which was notably higher than the current ratio. This suggests that the company may be experiencing challenges in generating enough operating income to comfortably cover its interest payments compared to the same period last year.
Overall, while Ball Corp.'s interest coverage ratio has decreased in recent quarters, it is still at a level that demonstrates the company's ability to meet its interest obligations. However, stakeholders may want to monitor this trend closely to ensure that the company maintains a healthy financial position in the face of any challenges.
Peer comparison
Dec 31, 2023