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