Deere & Company (DE)
Interest coverage
| Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 12,542,000 | 14,036,000 | 15,074,000 | 15,537,000 | 15,490,000 | 14,870,000 | 13,467,000 | 11,793,000 | 10,200,000 | 8,785,000 | 8,353,000 | 8,195,000 | 8,616,000 | 8,158,000 | 7,314,000 | 5,979,000 | 5,079,000 | 4,927,000 | 4,863,000 | 5,439,000 |
| Interest expense (ttm) | US$ in thousands | 3,348,000 | 3,260,000 | 3,043,000 | 2,776,000 | 2,453,000 | 2,020,000 | 1,693,000 | 1,311,000 | 1,061,000 | 922,000 | 870,000 | 951,000 | 993,000 | 1,061,000 | 1,107,000 | 1,181,000 | 1,246,000 | 1,356,000 | 1,440,000 | 1,449,000 |
| Interest coverage | 3.75 | 4.31 | 4.95 | 5.60 | 6.31 | 7.36 | 7.95 | 9.00 | 9.61 | 9.53 | 9.60 | 8.62 | 8.68 | 7.69 | 6.61 | 5.06 | 4.08 | 3.63 | 3.38 | 3.75 |
October 27, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $12,542,000K ÷ $3,348,000K
= 3.75
The interest coverage ratio of Deere & Company has shown a generally favorable trend over the recent quarters, indicating the company's improving ability to cover its interest expenses with its operating income. The ratio has consistently increased from 3.38 in February 2020 to 9.61 in October 2022, before gradually stabilizing at around 9.00 in the most recent quarter, ending in October 2024.
This demonstrates a strong ability of Deere & Company to meet its interest obligations comfortably, as the ratio has been consistently above 1, implying that the company is generating significantly more operating income than the interest expenses it needs to pay. A higher interest coverage ratio is generally seen as a positive indicator of a company's financial health and ability to service its debt obligations.
Overall, the improving trend in Deere & Company's interest coverage ratio suggests a strengthening financial position and indicates a reduced risk of default on its debt obligations due to its strong ability to generate earnings relative to its interest expenses.
Peer comparison
Oct 27, 2024