Colgate-Palmolive Company (CL)
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 | 4,267,000 | 4,276,000 | 4,240,000 | 4,122,000 | 3,984,000 | 3,114,000 | 3,032,000 | 2,942,000 | 2,893,000 | 3,056,000 | 3,076,000 | 3,188,000 | 3,332,000 | 3,936,000 | 3,987,000 | 3,937,000 | 3,885,000 | 3,847,000 | 3,685,000 | 3,627,000 |
Interest expense (ttm) | US$ in thousands | 174,000 | 236,000 | 238,000 | 236,000 | 232,000 | 225,000 | 207,000 | 180,000 | 153,000 | 129,000 | 187,000 | 181,000 | 183,000 | 209,000 | 147,000 | 157,000 | 164,000 | 139,000 | 138,000 | 141,000 |
Interest coverage | 24.52 | 18.12 | 17.82 | 17.47 | 17.17 | 13.84 | 14.65 | 16.34 | 18.91 | 23.69 | 16.45 | 17.61 | 18.21 | 18.83 | 27.12 | 25.08 | 23.69 | 27.68 | 26.70 | 25.72 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,267,000K ÷ $174,000K
= 24.52
The interest coverage ratio is a measure of a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing the interest coverage ratio of Colgate-Palmolive Company based on the provided data shows fluctuations over the quarters. The interest coverage ratio ranged from a high of 27.68 in September 2020 to a low of 13.84 in September 2023. Generally, a ratio above 2 is considered healthy, indicating that the company can easily cover its interest payments.
Colgate-Palmolive's interest coverage ratio peaked in mid-2020 and has since experienced fluctuations, showing a downward trend from that point onwards. The declining trend from 2021 to 2024 may raise concerns about the company's ability to meet its interest obligations solely based on its operating income.
A sustained decline in the interest coverage ratio could indicate increasing financial risk for Colgate-Palmolive, as it may struggle to cover its interest expenses from its operating profits. It is important for stakeholders and investors to closely monitor this ratio to assess the company's financial health and ability to service its debt.
Peer comparison
Dec 31, 2024
See also:
Colgate-Palmolive Company Interest Coverage (Quarterly Data)