Caterpillar Inc (CAT)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 13,885,000 | 13,561,000 | 9,755,000 | 8,275,000 | 4,835,000 |
| Interest expense | US$ in thousands | 512,000 | 511,000 | 443,000 | 488,000 | 514,000 |
| Interest coverage | 27.12 | 26.54 | 22.02 | 16.96 | 9.41 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $13,885,000K ÷ $512,000K
= 27.12
Interest coverage for Caterpillar Inc has shown a consistent upward trend over the past five years, indicating improved ability to meet interest obligations from operating income. The interest coverage ratio has increased from 9.41 in December 2020 to 27.12 in December 2024, reflecting a significant enhancement in the company's ability to cover interest expenses with operating profits. This improvement suggests a strengthened financial position and reduced risk of default on debt obligations. Caterpillar's interest coverage has more than doubled over this period, demonstrating strong financial performance and effective management of interest-bearing liabilities.
Peer comparison
Dec 31, 2024