Cencora Inc. (COR)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,175,250 | 2,340,730 | 2,366,380 | 2,354,200 | -5,135,350 |
| Interest expense | US$ in thousands | 156,991 | 8,500 | 11,900 | 9,700 | 6,400 |
| Interest coverage | 13.86 | 275.38 | 198.86 | 242.70 | -802.40 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,175,250K ÷ $156,991K
= 13.86
Based on the interest coverage ratios for Cencora Inc. over the past five years, there has been significant variability in the company's ability to cover its interest expenses with its operating income.
In 2024, the interest coverage ratio stands at 13.86, indicating that the company is generating operating income that is nearly 14 times its interest expenses. This suggests a healthy financial position and indicates that Cencora Inc. should have no issues meeting its interest obligations.
In 2023, the interest coverage ratio spiked to 275.38, reflecting an exceptionally strong ability to cover interest expenses with operating income. This could be a result of increased profitability or a decrease in interest expenses during that period.
In 2022 and 2021, the interest coverage ratios remained high at 198.86 and 242.70, respectively, indicating a consistent ability to comfortably cover interest payments with operating income.
However, in 2020, the interest coverage ratio dropped significantly to -802.40, indicating that the company's operating income was not sufficient to cover its interest expenses during that period. This suggests a concerning financial situation where the company may have faced challenges in meeting its interest obligations.
Overall, while the interest coverage ratios in most years reflect a strong ability to cover interest expenses, the sharp decline in 2020 highlights the importance of consistent profitability and operational efficiency in ensuring the company's financial stability and ability to meet its debt obligations.
Peer comparison
Sep 30, 2024