Elevance Health Inc (ELV)
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 | 7,696,000 | 8,745,000 | 8,451,000 | 4,702,000 | 7,022,000 |
| Interest expense | US$ in thousands | 1,185,000 | 1,030,000 | 851,000 | 798,000 | 784,000 |
| Interest coverage | 6.49 | 8.49 | 9.93 | 5.89 | 8.96 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $7,696,000K ÷ $1,185,000K
= 6.49
Based on the data provided for Elevance Health Inc's interest coverage ratio over the years 2020 to 2024, the company's ability to meet its interest obligations varied. In 2020, the interest coverage ratio was 8.96, indicating that the company was comfortably able to cover its interest expenses almost nine times over with its operating income. However, there was a decline in 2021 with the interest coverage ratio falling to 5.89, which suggests a decrease in the company's ability to cover interest expenses.
The trend showed improvement in 2022, with the interest coverage ratio increasing to 9.93, indicating a stronger ability to cover interest payments. Subsequently, in 2023 and 2024, the interest coverage ratios were 8.49 and 6.49 respectively, which, although lower than the peak in 2022, still demonstrate the company's ability to cover its interest expenses, albeit at slightly reduced levels compared to the earlier year.
Overall, it is important for Elevance Health Inc to closely monitor its interest coverage ratio to ensure that it maintains a healthy balance between operating income and interest expenses, ensuring it can meet its financial obligations and safeguard its financial stability.
Peer comparison
Dec 31, 2024