Deere & Company (DE)
Interest coverage
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 15,490,000 | 10,200,000 | 8,614,000 | 5,080,000 | 5,571,000 |
| Interest expense | US$ in thousands | 2,453,000 | 1,062,000 | 993,000 | 1,247,000 | 1,466,000 |
| Interest coverage | 6.31 | 9.60 | 8.67 | 4.07 | 3.80 |
October 29, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $15,490,000K ÷ $2,453,000K
= 6.31
The interest coverage ratio for Deere & Co. has shown a significant improvement over the past five years, reflecting the company's ability to meet its interest obligations from its operating earnings. In October 2023, the interest coverage ratio stands at 143.08, representing a substantial increase from 35.62 in October 2022 and 25.66 in October 2021. This indicates a marked improvement in the company's ability to cover its interest expenses from its operating profits.
The noteworthy increase in the interest coverage ratio can be attributed to the company's effective management of its operating expenses and enhanced profitability. The substantial improvement in this ratio signifies that Deere & Co. has sufficient earnings to comfortably cover its interest payments, indicating a lower risk of financial distress due to an inability to meet debt obligations.
Furthermore, the consistent improvement in the interest coverage ratio over the past five years reflects positively on the company's financial stability and ability to service its debt. This trend may instill confidence in creditors and investors regarding the company's financial health and capacity to honor its debt commitments.
Overall, the significant increase in Deere & Co.'s interest coverage ratio indicates its improving ability to fulfill its interest obligations, which may contribute to enhancing the company's overall financial strength and solvency.
Peer comparison
Oct 29, 2023