CVS Health Corp (CVS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 13,807,000 | 7,899,000 | 12,935,000 | 12,655,000 | 12,035,000 |
| Interest expense | US$ in thousands | 2,658,000 | 2,287,000 | 2,503,000 | 2,907,000 | 3,035,000 |
| Interest coverage | 5.19 | 3.45 | 5.17 | 4.35 | 3.97 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $13,807,000K ÷ $2,658,000K
= 5.19
The interest coverage ratio of CVS Health Corp has shown a positive trend over the past five years, indicating the company's ability to easily meet its interest payment obligations. The ratio has consistently improved from 3.95 in 2019 to 5.49 in 2023. This suggests that CVS Health Corp's operating profits have been sufficient to cover its interest expenses, with a higher ratio implying a stronger ability to pay off interest costs. The company's interest coverage ratio has remained above 1, signaling financial stability and decreasing the risk of default on debt obligations. Overall, the increasing trend in the interest coverage ratio reflects CVS Health Corp's improved financial health and capacity to handle its interest payments efficiently.
Peer comparison
Dec 31, 2023