Corteva Inc (CTVA)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,508,000 | 941,000 | 1,505,000 | 2,376,000 | 1,211,000 |
| Interest expense | US$ in thousands | 233,000 | 233,000 | 79,000 | 30,000 | 45,000 |
| Interest coverage | 6.47 | 4.04 | 19.05 | 79.20 | 26.91 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,508,000K ÷ $233,000K
= 6.47
The interest coverage ratio for Corteva Inc has been somewhat volatile over the past five years. In December 31, 2020, the company had an interest coverage ratio of 26.91, indicating that it was generating sufficient operating income to cover its interest expenses nearly 27 times over. This was a strong position for the company.
By December 31, 2021, Corteva's interest coverage ratio improved significantly to 79.20, which is a very positive sign. It suggests that the company's ability to cover its interest payments with operating income improved substantially, indicating strong financial health.
However, there was a notable decline in the interest coverage ratio by December 31, 2022, dropping to 19.05. Although the ratio remained above 1, indicating that Corteva was still generating enough operating income to cover its interest expenses, the significant decrease might raise some concerns.
In the following years, the interest coverage ratio continued to decline further. By December 31, 2023, it reached 4.04, and by December 31, 2024, it slightly improved to 6.47. These declining figures suggest that Corteva's ability to cover its interest payments with operating income had decreased significantly, indicating potential financial strain.
Overall, the trend in Corteva Inc's interest coverage ratio reflects some fluctuations and a significant decline in recent years, highlighting the importance of monitoring the company's ability to generate enough operating income to meet its interest obligations.
Peer comparison
Dec 31, 2024