Cencora Inc. (COR)
Interest coverage
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,175,249 | 2,525,551 | 2,523,203 | 2,530,463 | 2,340,731 | 2,318,309 | 2,135,478 | 2,355,116 | 2,366,378 | 2,473,754 | 2,607,184 | 2,451,374 | 2,354,197 | -4,320,838 | -4,536,734 | -4,851,566 | -5,135,357 | 1,157,624 | 1,159,487 | 897,537 |
| Interest expense (ttm) | US$ in thousands | 215,331 | 255,304 | 254,232 | 241,531 | 228,931 | 219,512 | 214,510 | 205,773 | 216,389 | 219,462 | 177,622 | 133,386 | 87,659 | 43,419 | 41,940 | 40,958 | 40,000 | 39,729 | 39,641 | 38,374 |
| Interest coverage | 10.10 | 9.89 | 9.92 | 10.48 | 10.22 | 10.56 | 9.96 | 11.45 | 10.94 | 11.27 | 14.68 | 18.38 | 26.86 | -99.51 | -108.17 | -118.45 | -128.38 | 29.14 | 29.25 | 23.39 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,175,249K ÷ $215,331K
= 10.10
The interest coverage ratio of Cencora Inc. has shown fluctuating trends over the period under review. Generally, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
In the earlier periods, from Dec 31, 2019, to Jun 30, 2021, the interest coverage ratio was robust, significantly exceeding 10. This signifies that Cencora Inc. had substantial earnings to cover its interest expenses comfortably during these periods.
However, from Sep 30, 2021, to Sep 30, 2022, the interest coverage ratio dropped notably, but still remained above 10, indicating a moderate decrease in the company's ability to cover interest payments from its operating profits.
In the more recent periods, there has been a dramatic decline in the interest coverage ratio, with figures turning negative (-99.51, -108.17, -118.45) for the quarters Mar 31, 2023 to Sep 30, 2023. This indicates that during these quarters, the earnings of Cencora Inc. were insufficient to cover its interest expenses, raising concerns about the company's financial health and ability to service its debts.
The subsequent recovery in the interest coverage ratio, seen from Dec 31, 2023, to Sep 30, 2024, shows some improvement, albeit still below the earlier levels witnessed before the dip.
Overall, from a historical perspective, Cencora Inc. has experienced fluctuations in its interest coverage ratio, with recent periods indicating challenges in meeting interest obligations from operating profits. Monitoring this ratio closely would be prudent to assess the company's ability to service its debt obligations in the future.
Peer comparison
Sep 30, 2024