Quest Diagnostics Incorporated (DGX)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,416,000 | 1,262,000 | 1,383,000 | 2,751,000 | 2,050,000 |
| Interest expense | US$ in thousands | 226,000 | 152,000 | 138,000 | 151,000 | 163,000 |
| Interest coverage | 6.27 | 8.30 | 10.02 | 18.22 | 12.58 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,416,000K ÷ $226,000K
= 6.27
Based on the provided data, the interest coverage ratio for Quest Diagnostics Incorporated has displayed some fluctuations over the years. As of December 31, 2020, the interest coverage ratio was 12.58, indicating that the company generated sufficient operating income to cover its interest expenses comfortably.
The ratio improved significantly to 18.22 as of December 31, 2021, suggesting even stronger ability to cover interest payments. However, the trend reversed in the following years, with the interest coverage ratio declining to 10.02 by December 31, 2022, and further dropping to 8.30 by December 31, 2023.
The most recent data point, December 31, 2024, shows a notable decrease in the interest coverage ratio to 6.27. This decline could signal potential challenges in meeting interest obligations with operating income alone.
Overall, while the company had robust interest coverage in the past, there has been a recent downward trend, indicating a potential strain on Quest Diagnostics' ability to service its debt obligations from operating profits. It would be essential for stakeholders to monitor this trend closely to assess the company's financial health and debt repayment capacity.
Peer comparison
Dec 31, 2024