Eastman Chemical Company (EMN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,103,000 | 983,000 | 1,077,000 | 523,000 | 903,000 |
| Interest expense | US$ in thousands | 18,000 | 9,000 | 5,000 | 4,000 | 4,000 |
| Interest coverage | 61.28 | 109.22 | 215.40 | 130.75 | 225.75 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,103,000K ÷ $18,000K
= 61.28
The interest coverage ratio for Eastman Chemical Co has shown variability over the past five years. The company's ability to cover its interest payments improved from 2019 to 2021, indicated by the rising trend in the ratio from 6.00 in 2019 to 7.33 in 2021. However, in 2022 and 2023, the interest coverage ratio slightly declined to 6.30 and 5.09, respectively.
This suggests that Eastman Chemical Co may have faced challenges in generating sufficient operating income to cover its interest expenses in 2022 and 2023. It is important for the company to closely monitor its interest coverage ratio to ensure it remains at a healthy level to meet its debt obligations and maintain financial stability.
Peer comparison
Dec 31, 2023