Crown Holdings Inc (CCK)
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 | 1,394,000 | 1,247,000 | 1,135,000 | 1,082,000 | 1,108,000 | 1,108,000 | 1,034,000 | 1,152,000 | 1,254,000 | -243,000 | -259,000 | -361,000 | -364,000 | 1,206,000 | 1,317,000 | 1,213,000 | 1,074,000 | 998,000 | 977,000 | 1,061,000 |
| Interest expense (ttm) | US$ in thousands | 452,000 | 457,000 | 449,000 | 447,000 | 436,000 | 413,000 | 378,000 | 332,000 | 284,000 | 244,000 | 234,000 | 238,000 | 253,000 | 273,000 | 276,000 | 281,000 | 292,000 | 299,000 | 325,000 | 349,000 |
| Interest coverage | 3.08 | 2.73 | 2.53 | 2.42 | 2.54 | 2.68 | 2.74 | 3.47 | 4.42 | -1.00 | -1.11 | -1.52 | -1.44 | 4.42 | 4.77 | 4.32 | 3.68 | 3.34 | 3.01 | 3.04 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,394,000K ÷ $452,000K
= 3.08
Interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.
Based on the provided data for Crown Holdings Inc, the interest coverage ratio fluctuated over the years. From March 31, 2020, to June 30, 2021, the company demonstrated a consistent improvement in its interest coverage ratio, indicating a stronger ability to cover its interest obligations. The ratio peaked at 4.77 on June 30, 2021, suggesting a comfortable cushion to meet interest payments.
However, there was a significant decline in the interest coverage ratio in the last quarter of 2021 and the first three quarters of 2022, with negative values recorded. A negative interest coverage ratio indicates that the company's earnings were insufficient to cover its interest expenses during those periods, raising concerns about its financial health and ability to service debt obligations.
The ratio bounced back to a positive figure of 4.42 on December 31, 2022, and remained relatively stable around 3 in the subsequent quarters up to December 31, 2024. While the company managed to recover from the negative trend, it is important to closely monitor future changes in the interest coverage ratio to assess Crown Holdings Inc's ongoing ability to manage its debt and interest payments effectively.
Peer comparison
Dec 31, 2024