Eastman Chemical Company (EMN)
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 | 1,344,000 | 1,192,000 | 1,126,000 | 1,070,000 | 1,058,000 | 1,012,000 | 1,075,000 | 1,221,000 | 1,285,000 | 1,706,000 | 1,808,000 | 1,280,000 | 1,336,000 | 835,000 | 646,000 | 899,000 | 897,000 | 961,000 | 1,091,000 | 1,285,000 |
| Interest expense (ttm) | US$ in thousands | 216,000 | 219,000 | 223,000 | 223,000 | 222,000 | 211,000 | 197,000 | 188,000 | 182,000 | 182,000 | 188,000 | 194,000 | 198,000 | 201,000 | 204,000 | 208,000 | 210,000 | 212,000 | 214,000 | 214,000 |
| Interest coverage | 6.22 | 5.44 | 5.05 | 4.80 | 4.77 | 4.80 | 5.46 | 6.49 | 7.06 | 9.37 | 9.62 | 6.60 | 6.75 | 4.15 | 3.17 | 4.32 | 4.27 | 4.53 | 5.10 | 6.00 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,344,000K ÷ $216,000K
= 6.22
Eastman Chemical Company's interest coverage ratio has shown fluctuating trends over the past few years. The ratio measures the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest payments.
From March 31, 2020, to June 30, 2021, the interest coverage ratio declined from 6.00 to 3.17, indicating a decrease in the company's ability to meet its interest obligations. This decline may raise concerns about the company's financial health and ability to service its debt.
However, from June 30, 2021, to June 30, 2022, there was a significant improvement in the interest coverage ratio, jumping to 9.62. This improvement suggests that the company's operating income increased enough to cover its interest expenses, reflecting a positive trend in its financial performance.
The interest coverage ratio remained relatively strong from June 30, 2022, to December 31, 2024, ranging between 4.77 and 6.22. This stability indicates that the company's ability to cover its interest payments has been consistent and sufficient during this period.
Overall, while there have been fluctuations in Eastman Chemical Company's interest coverage ratio, the recent trend shows improved performance and stability in meeting its interest obligations, which is a positive indicator for the company's financial outlook.
Peer comparison
Dec 31, 2024