Becton Dickinson and Company (BDX)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,533,000 | 2,068,000 | 2,325,000 | 2,649,000 | 1,464,000 |
| Interest expense | US$ in thousands | 528,000 | 452,000 | 398,000 | 469,000 | 528,000 |
| Interest coverage | 4.80 | 4.58 | 5.84 | 5.65 | 2.77 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,533,000K ÷ $528,000K
= 4.80
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher ratio indicates a stronger ability to cover interest expense.
Analyzing the interest coverage ratios of Becton Dickinson and Company over the past five years, we observe a generally positive trend. In 2020, the interest coverage ratio was 2.77, indicating that the company could cover its interest payments 2.77 times from its operating income. This ratio improved in subsequent years, reaching 5.84 in 2022. However, there was a slight decrease in 2023 and 2024, with ratios of 4.58 and 4.80, respectively.
Overall, despite the slight decline in the most recent years, Becton Dickinson has maintained a healthy interest coverage ratio above 4. This suggests that the company has a sufficient operating income to meet its interest obligations comfortably. Management should continue to monitor this ratio to ensure it remains at a level that indicates financial stability and the ability to service debt effectively.
Peer comparison
Sep 30, 2024