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)