Dow Inc (DOW)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,469,000 | 1,852,000 | 1,947,000 | 2,036,000 | 1,453,000 | 2,596,000 | 3,147,000 | 4,595,000 | 6,789,000 | 8,043,000 | 9,309,000 | 9,604,000 | 8,868,000 | 8,634,000 | 6,452,000 | 3,849,000 | 2,936,000 | -1,048,000 | -613,000 | -191,000 |
| Interest expense (ttm) | US$ in thousands | 954,000 | 900,000 | 901,000 | 884,000 | 868,000 | 818,000 | 781,000 | 775,000 | 757,000 | 749,000 | 770,000 | 789,000 | 817,000 | 860,000 | 885,000 | 898,000 | 916,000 | 944,000 | 974,000 | 1,005,000 |
| Interest coverage | 2.59 | 2.06 | 2.16 | 2.30 | 1.67 | 3.17 | 4.03 | 5.93 | 8.97 | 10.74 | 12.09 | 12.17 | 10.85 | 10.04 | 7.29 | 4.29 | 3.21 | -1.11 | -0.63 | -0.19 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,469,000K ÷ $954,000K
= 2.59
Dow Inc's interest coverage ratio indicates the company's ability to meet its interest payments on outstanding debt.
The interest coverage ratio for Dow Inc has shown a significant improvement over the period from March 31, 2020, to December 31, 2024. Initially, the company had negative interest coverage ratios, indicating that it was unable to cover its interest expenses with its operating income. However, starting from December 31, 2020, the interest coverage ratio turned positive and continued to increase steadily until reaching a peak of 12.17 on March 31, 2022.
Subsequently, the interest coverage ratio started to decline gradually but remained above 2 throughout the period until December 31, 2024. A ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses.
Overall, the trend in Dow Inc's interest coverage ratio shows significant improvement, reflecting the company's strengthened ability to cover its interest obligations with its operating earnings.
Peer comparison
Dec 31, 2024