Baxter International Inc (BAX)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,134,000 | -1,950,000 | 1,672,000 | 1,437,000 | 1,071,000 |
| Interest expense | US$ in thousands | 512,000 | 415,000 | 206,000 | 153,000 | 111,000 |
| Interest coverage | 6.12 | -4.70 | 8.12 | 9.39 | 9.65 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,134,000K ÷ $512,000K
= 6.12
Interest coverage measures a company's ability to pay its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations. Baxter International Inc.'s interest coverage has shown a declining trend over the past five years, from 24.96 in 2019 to 0.82 in 2023. This decreasing trend may raise concerns about the company's ability to cover its interest expenses from its operating income. The significant drop in interest coverage from 2021 to 2023, from 8.39 to 0.82, suggests a notable deterioration in the company's ability to meet its interest obligations. Further analysis of Baxter International Inc.'s financial condition and its ability to generate sufficient operating income will be essential to understand the reasons behind this decline in interest coverage.
Peer comparison
Dec 31, 2023