Deere & Company (DE)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 9,672,000 | 11,147,000 | 12,711,000 | 14,304,000 | 14,126,000 | 13,949,000 | 13,851,000 | 13,752,000 | 14,964,000 | 16,179,000 | 16,741,000 | 15,855,000 | 14,601,000 | 13,598,000 | 12,419,000 | 12,282,000 | 12,053,000 | 11,558,000 | 9,700,000 | 8,247,000 |
| Interest expense (ttm) | US$ in thousands | 3,409,000 | 3,420,000 | 3,386,000 | 3,352,000 | 3,314,000 | 3,276,000 | 3,222,000 | 3,168,000 | 2,989,000 | 2,810,000 | 2,597,000 | 2,294,000 | 2,150,000 | 1,876,000 | 1,656,000 | 1,473,000 | 1,181,000 | 1,019,000 | 899,000 | 832,000 |
| Interest coverage | 2.84 | 3.26 | 3.75 | 4.27 | 4.26 | 4.26 | 4.30 | 4.34 | 5.01 | 5.76 | 6.45 | 6.91 | 6.79 | 7.25 | 7.50 | 8.34 | 10.21 | 11.34 | 10.79 | 9.91 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $9,672,000K ÷ $3,409,000K
= 2.84
The interest coverage ratio for Deere & Company has been fluctuating over the periods provided in the data. The interest coverage ratio is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates the company's ability to meet its interest payment obligations.
Initially, in May 2022, the interest coverage ratio was 9.91, indicating that Deere & Company's earnings were nearly 10 times its interest expense. This suggests a strong ability to cover interest payments.
Over the ensuing quarters, the interest coverage ratio generally remained above 7, although there were slight fluctuations. Around January 2024, the interest coverage ratio started to decline more significantly, dropping below 5. This could indicate a deterioration in the company's profitability relative to its interest expenses.
By January 2025, the interest coverage ratio had decreased to 2.84, suggesting a potentially tighter financial position for Deere & Company in meeting its interest payments. A declining trend in the interest coverage ratio may raise concerns among investors and lenders regarding the company's financial health.
It would be advisable for stakeholders to closely monitor Deere & Company's financial performance and assess the factors contributing to the decline in the interest coverage ratio to make informed decisions regarding the company's financial outlook and creditworthiness.
Peer comparison
Jan 31, 2025