Ford Motor Company (F)

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	5,219,000	11,598,000	6,276,000	4,523,000	-4,408,000
Interest expense	US$ in thousands	—	7,613,000	4,593,000	4,593,000	5,051,000
Interest coverage		—	1.52	1.37	0.98	-0.87

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $5,219,000K ÷ $—K
= —

Interest coverage ratio is a financial metric that indicates a company's ability to cover its interest expenses with its operating income. A ratio below 1 suggests that the company is not generating enough operating income to cover its interest expenses.

Looking at Ford Motor Company's interest coverage over the past few years:

- As of December 31, 2020, the interest coverage ratio was -0.87, which indicates that Ford's operating income was not sufficient to cover its interest expenses. This raises concerns about the company's ability to meet its debt obligations.

- By the end of 2021, the interest coverage ratio improved to 0.98, but still remained below 1, indicating that Ford was barely able to cover its interest expenses with its operating income.

- In 2022, the interest coverage ratio increased to 1.37, showing a slight improvement in Ford's ability to cover its interest payments. However, the ratio is still relatively low, suggesting continued vulnerability.

- As of December 31, 2023, the interest coverage ratio reached 1.52, indicating a further improvement in Ford's ability to cover its interest expenses. While the ratio is moving in the right direction, it remains relatively low compared to industry benchmarks.

- The data for December 31, 2024, is not available.

Overall, Ford Motor Company has shown some progress in improving its interest coverage ratio over the years, but the ratios are still relatively low, indicating the need for continued monitoring of the company's financial health and debt servicing capacity.