Centene Corp (CNC)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,326,000 | 2,627,000 | 2,489,000 | 3,515,000 | 2,206,000 |
| Interest expense | US$ in thousands | 725,000 | 665,000 | 665,000 | 728,000 | 412,000 |
| Interest coverage | 5.97 | 3.95 | 3.74 | 4.83 | 5.35 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,326,000K ÷ $725,000K
= 5.97
The interest coverage ratio measures a company's ability to meet its interest obligations on its debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Looking at the trend in Centene Corp.'s interest coverage ratio over the past five years, we can see that it has remained relatively stable, fluctuating between 4.33 and 5.47. This indicates that Centene has consistently generated enough operating income to cover its interest expenses, with a ratio comfortably above 1.
A higher interest coverage ratio signifies that the company is in a better position to fulfill its interest payments, indicating financial stability. Centene's ratios between 4.33 and 5.47 demonstrate a solid ability to service its debt obligations.
Overall, the consistent and healthy interest coverage ratios suggest that Centene has been effectively managing its debt and maintaining a strong financial position.
Peer comparison
Dec 31, 2023