Deere & Company (DE)
Interest coverage
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 12,542,000 | 15,490,000 | 10,200,000 | 8,614,000 | 5,080,000 |
| Interest expense | US$ in thousands | 3,348,000 | 2,453,000 | 1,062,000 | 993,000 | 1,247,000 |
| Interest coverage | 3.75 | 6.31 | 9.60 | 8.67 | 4.07 |
October 27, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $12,542,000K ÷ $3,348,000K
= 3.75
Interest coverage measures a company's ability to meet its interest payments on outstanding debt using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Deere & Company's interest coverage has fluctuated over the past five years. In 2024, the interest coverage ratio was 3.75, representing a decrease from the previous year. While the company's earnings were still sufficient to cover interest payments, the lower ratio may indicate a reduced capacity to meet debt obligations.
Comparing to the previous years, the interest coverage ratio has shown variability. In 2023, the ratio was higher at 6.31, indicating a better ability to cover interest expenses. The highest interest coverage ratio was observed in 2022 at 9.60, suggesting a strong ability to cover interest payments using operating earnings.
In 2021, the interest coverage ratio was 8.67, indicating a comfortable level of coverage. However, in 2020, the ratio decreased to 4.07, suggesting a potential strain on the company's ability to meet interest obligations with its earnings.
Overall, Deere & Company's interest coverage has shown fluctuations over the past five years, with some years demonstrating stronger ability to cover interest payments than others. Investors and creditors may monitor this ratio closely to assess the company's financial health and ability to manage its debt levels effectively.
Peer comparison
Oct 27, 2024