Colgate-Palmolive Company (CL)

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	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	3,554,000	3,514,000	3,532,000	3,590,000
Interest expense (ttm)	US$ in thousands	232,000	225,000	207,000	180,000	153,000	138,000	196,000	190,000	192,000	209,000	147,000	157,000	164,000	139,000	138,000	141,000	145,000	150,000	151,000	148,000
Interest coverage		17.17	13.84	14.65	16.34	18.91	22.14	15.69	16.78	17.35	18.83	27.12	25.08	23.69	27.68	26.70	25.72	24.51	23.43	23.39	24.26

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,984,000K ÷ $232,000K
= 17.17

Colgate-Palmolive Co.'s interest coverage has demonstrated a generally high level of capability to meet its interest obligations over the past eight quarters. The interest coverage ratio has ranged from 17.34 to 29.97, indicating the company's ability to comfortably cover its interest expenses with its earnings before interest and taxes (EBIT).

The consistent and relatively high interest coverage ratios suggest that Colgate-Palmolive Co. has a strong capacity to service its debt obligations. The trend over the period shows some fluctuations, with a peak in Q4 2022 at 29.97 and a low in Q3 2023 at 17.34. However, even at its lowest point, the interest coverage remains above 1, indicating that the company's earnings are sufficient to cover its interest expenses.

Overall, a high and stable interest coverage ratio is a positive indicator of financial health, as it demonstrates the company's ability to handle its interest payments without being overly burdened by debt.