CVS Health Corp (CVS)
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 | 8,530,000 | 9,556,000 | 12,432,000 | 12,630,000 | 13,807,000 | 13,909,000 | 6,316,000 | 7,775,000 | 7,899,000 | 6,591,000 | 13,234,000 | 12,895,000 | 12,935,000 | 12,639,000 | 12,423,000 | 12,774,000 | 12,655,000 | 13,834,000 | 14,173,000 | 12,827,000 |
| Interest expense (ttm) | US$ in thousands | 2,958,000 | 2,890,000 | 2,831,000 | 2,785,000 | 2,658,000 | 2,520,000 | 2,393,000 | 2,290,000 | 2,287,000 | 2,343,000 | 2,379,000 | 2,432,000 | 2,503,000 | 2,573,000 | 2,702,000 | 2,831,000 | 2,907,000 | 2,963,000 | 2,979,000 | 2,986,000 |
| Interest coverage | 2.88 | 3.31 | 4.39 | 4.54 | 5.19 | 5.52 | 2.64 | 3.40 | 3.45 | 2.81 | 5.56 | 5.30 | 5.17 | 4.91 | 4.60 | 4.51 | 4.35 | 4.67 | 4.76 | 4.30 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $8,530,000K ÷ $2,958,000K
= 2.88
CVS Health Corp's interest coverage ratio, a measure of the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT), has shown some fluctuations over the past few years. The interest coverage ratio increased from 4.30 in March 2020 to 5.56 in June 2022, indicating an improvement in the company's ability to meet its interest obligations.
However, there was a significant drop in the interest coverage ratio to 2.81 in September 2022, signaling a potential strain on CVS Health Corp's ability to cover its interest expenses. This decline may merit further investigation into the company's financial health and the reasons behind this decrease.
Subsequently, the interest coverage ratio fluctuated between 2.64 and 5.52 for the period up to December 2024. Overall, it is essential for investors and stakeholders to monitor CVS Health Corp's interest coverage ratio closely to assess the company's financial risk and sustainability in meeting its debt obligations.
Peer comparison
Dec 31, 2024