Crown Holdings Inc (CCK)
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 | 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 | 1,104,000 | 1,078,000 | 1,043,000 | 1,011,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 367,000 | 392,000 | 402,000 | 408,000 |
| Interest coverage | 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 | 3.01 | 2.75 | 2.59 | 2.48 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,108,000K ÷ $436,000K
= 2.54
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses. In the case of Crown Holdings, Inc., the interest coverage ratio has been relatively stable over the past eight quarters, ranging from 3.52 to 6.23.
A ratio above 1 indicates that the company can cover its interest expenses with its operating income. In the most recent quarter, Q4 2023, Crown Holdings, Inc. had an interest coverage ratio of 3.65, which suggests that the company generated 3.65 times more operating income than it needed to cover its interest expenses.
Despite a slight decrease in the interest coverage ratio in Q3 and Q2 2023 compared to previous quarters, the company still maintained healthy coverage levels above 3. This indicates that Crown Holdings, Inc. has been able to comfortably meet its interest obligations using its operating profits.
Overall, Crown Holdings, Inc. appears to have a solid ability to cover its interest expenses, as indicated by consistent interest coverage ratios above 3 over the past two years. However, it is important to continue monitoring this ratio to ensure the company remains financially stable and can manage its debt obligations effectively.
Peer comparison
Dec 31, 2023