Caterpillar Inc (CAT)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 14,101,000 | 14,126,000 | 14,372,000 | 14,192,000 | 13,988,000 | 13,905,000 | 13,135,000 | 11,460,000 | 10,271,000 | 9,505,000 | 8,727,000 | 8,461,000 | 8,353,000 | 6,996,000 | 6,282,000 | 5,378,000 | 4,835,000 | 5,125,000 | 6,013,000 | 7,260,000 |
| Interest expense (ttm) | US$ in thousands | 512,000 | 531,000 | 535,000 | 525,000 | 511,000 | 502,000 | 482,000 | 463,000 | 443,000 | 438,000 | 443,000 | 455,000 | 488,000 | 506,000 | 528,000 | 543,000 | 514,000 | 496,000 | 463,000 | 431,000 |
| Interest coverage | 27.54 | 26.60 | 26.86 | 27.03 | 27.37 | 27.70 | 27.25 | 24.75 | 23.19 | 21.70 | 19.70 | 18.60 | 17.12 | 13.83 | 11.90 | 9.90 | 9.41 | 10.33 | 12.99 | 16.84 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,101,000K ÷ $512,000K
= 27.54
The interest coverage ratio of Caterpillar Inc has exhibited fluctuations over the years, indicating changes in the company's ability to cover its interest payments with its earnings. From March 31, 2020, to December 31, 2024, the interest coverage ratio ranged from a high of 27.70 to a low of 9.41.
The trend shows a general decline in the interest coverage ratio from the initial value of 16.84 on March 31, 2020, reaching its lowest point on December 31, 2020. However, there was a subsequent improvement in the ratio, with values steadily increasing to 27.54 by December 31, 2024.
Overall, the interest coverage ratio of Caterpillar Inc improved significantly over the analyzed period, showcasing the company's enhanced ability to meet its interest obligations with operating income. This positive trend suggests a strengthening financial position and reduced risk of financial distress related to interest payments.
Peer comparison
Dec 31, 2024