Corteva Inc (CTVA)
Interest coverage
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,646,000 | 1,237,000 | 1,418,000 | 1,378,000 | 1,608,000 | 1,702,000 | 1,710,000 | 1,856,000 | 1,677,000 | 2,129,000 | 2,497,000 | 2,461,000 | 2,635,000 | 2,290,000 | 1,804,000 | 1,369,000 | 1,061,000 | 1,086,000 | 970,000 | 683,000 |
| Interest expense (ttm) | US$ in thousands | 233,000 | 235,000 | 227,000 | 243,000 | 233,000 | 207,000 | 167,000 | 101,000 | 79,000 | 51,000 | 41,000 | 32,000 | 30,000 | 32,000 | 35,000 | 42,000 | 45,000 | 59,000 | 67,000 | 87,000 |
| Interest coverage | 7.06 | 5.26 | 6.25 | 5.67 | 6.90 | 8.22 | 10.24 | 18.38 | 21.23 | 41.75 | 60.90 | 76.91 | 87.83 | 71.56 | 51.54 | 32.60 | 23.58 | 18.41 | 14.48 | 7.85 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,646,000K ÷ $233,000K
= 7.06
Interest coverage ratio is a financial metric that measures a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing Corteva Inc's interest coverage ratio over the past few quarters reveals a positive trend. The ratio increased steadily from 7.85 in March 2020 to a peak of 87.83 in December 2021, indicating a strong ability to cover interest payments with earnings. However, the ratio started to decline from the peak, reaching 7.06 by the end of December 2024.
The progressive increase in the interest coverage ratio until December 2021 suggests that Corteva Inc was effectively managing its interest expenses and generating sufficient earnings to comfortably cover its debt obligations. The subsequent decline in the ratio indicates a potential decrease in earnings relative to interest expenses, which could raise concerns about Corteva's ability to service its debt in the future.
It is important for stakeholders to monitor Corteva Inc's interest coverage ratio closely to assess its financial health and capacity to meet its debt obligations. A declining trend in the ratio could signal increased financial risk and the need for strategic adjustments to improve the company's financial position.
Peer comparison
Dec 31, 2024