ConocoPhillips (COP)
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 | 25,065,000 | 25,903,000 | 29,173,000 | 33,653,000 | 36,311,000 | 35,782,000 | 31,966,000 | 27,985,000 | 22,718,000 | 17,439,000 | 12,892,000 | 8,363,000 | 4,746,000 | 5,266,000 | 7,431,000 | 9,910,000 | 14,233,000 | 16,937,000 | 18,347,000 | 18,183,000 |
| Interest expense (ttm) | US$ in thousands | 940,000 | 845,000 | 842,000 | 867,000 | 1,055,000 | 1,084,000 | 1,105,000 | 1,116,000 | 1,126,000 | 1,110,000 | 1,092,000 | 1,077,000 | 1,058,000 | 1,622,000 | 1,369,000 | 1,353,000 | 1,403,000 | 855,000 | 1,121,000 | 1,141,000 |
| Interest coverage | 26.66 | 30.65 | 34.65 | 38.82 | 34.42 | 33.01 | 28.93 | 25.08 | 20.18 | 15.71 | 11.81 | 7.77 | 4.49 | 3.25 | 5.43 | 7.32 | 10.14 | 19.81 | 16.37 | 15.94 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $25,065,000K ÷ $940,000K
= 26.66
Conoco Phillips' interest coverage ratio has shown consistent improvement over the past eight quarters. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher ratio indicates that the company is more capable of servicing its debt.
In Q4 2023, the interest coverage ratio stands at an impressive 44.74, reflecting a strong ability to cover its interest expenses with its EBIT. This represents a significant increase from the previous quarter's ratio of 23.45 in Q3 2023.
The upward trend in the interest coverage ratio over the past two years is a positive sign, indicating that Conoco Phillips' earnings are growing at a faster pace than its interest expenses. This suggests that the company is in a favorable position to meet its debt obligations and signifies financial stability and strength.
Overall, the consistent improvement in Conoco Phillips' interest coverage ratio demonstrates the company's solid financial health and ability to comfortably cover its interest payments, which is crucial for maintaining investor confidence and sustaining growth.
Peer comparison
Dec 31, 2023