Baxter International Inc (BAX)

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 3,145,000 3,006,000 -2,297,000 -1,919,000 -1,935,000 -1,966,000 1,419,000 1,466,000 1,672,000 1,563,000 1,514,000 1,416,000 1,437,000 992,000 1,041,000 1,067,000 1,071,000 1,698,000 1,591,000 1,665,000
Interest expense (ttm) US$ in thousands 512,000 520,000 493,000 454,000 415,000 368,000 313,000 257,000 206,000 169,000 157,000 160,000 153,000 142,000 128,000 116,000 111,000 104,000 100,000 96,000
Interest coverage 6.14 5.78 -4.66 -4.23 -4.66 -5.34 4.53 5.70 8.12 9.25 9.64 8.85 9.39 6.99 8.13 9.20 9.65 16.33 15.91 17.34

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,145,000K ÷ $512,000K
= 6.14

Interest coverage is a financial ratio used to assess a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. The higher the ratio, the more easily a company can cover its interest payments.

Analyzing the interest coverage of Baxter International Inc. based on the provided data, we see a fluctuating trend over the eight quarters presented.

In Q4 2023, Baxter's interest coverage ratio was 0.82, indicating that the company's EBIT was only able to cover 82% of its interest expenses for that quarter. This suggests a potential strain on Baxter's ability to meet its interest obligations.

The interest coverage ratio improved in Q3 2023 and Q2 2023 to 1.03 and 1.27, respectively, but remained relatively low. In Q1 2023, the ratio increased significantly to 2.18, indicating a stronger ability to cover interest expenses compared to the previous quarters.

Looking further back, in Q4 2022 and Q3 2022, Baxter's interest coverage ratios were 2.29 and 2.46, respectively, showing a better ability to cover interest expenses during these periods. The ratios improved significantly in Q2 2022 and Q1 2022 to 4.43 and 5.75, respectively, indicating a very healthy interest coverage during these quarters.

Overall, Baxter International Inc.'s interest coverage has been variable, with some quarters showing weaker coverage and others demonstrating more robust ability to pay interest expenses. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to service its debt obligations.


Peer comparison

Dec 31, 2023


See also:

Baxter International Inc Interest Coverage (Quarterly Data)