FMC Corporation (FMC)
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 | 651,600 | 535,000 | 1,131,700 | 1,024,700 | 878,400 |
| Interest expense | US$ in thousands | 235,800 | 237,200 | 151,800 | 131,100 | 151,300 |
| Interest coverage | 2.76 | 2.26 | 7.46 | 7.82 | 5.81 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $651,600K ÷ $235,800K
= 2.76
To analyze FMC Corporation's interest coverage, we evaluate the trend in the interest coverage ratio over the years provided in the data.
- As of December 31, 2020, FMC Corporation's interest coverage ratio was 5.81, indicating that the company generated earnings 5.81 times greater than its interest expense. This level reflects a moderate capacity to meet interest obligations.
- By December 31, 2021, the interest coverage ratio improved to 7.82, signaling a stronger ability to cover interest payments with earnings. This positive change suggests improved profitability or lower interest expenses.
- However, the ratio declined to 7.46 by December 31, 2022, although it remained relatively high, indicating the company's ability to easily service its debt obligations from operating profits.
- By December 31, 2023, there was a significant decrease in the interest coverage ratio to 2.26, which raises concerns about FMC Corporation's ability to cover its interest expenses adequately. Lower ratios may indicate declining profitability or increased interest costs.
- The trend continued to show a lower interest coverage ratio of 2.76 by December 31, 2024, underscoring ongoing challenges in meeting interest obligations efficiently.
In conclusion, the fluctuating interest coverage ratios indicate varying levels of financial risk for FMC Corporation over the years, with the notable decline in 2023 and 2024 requiring further investigation into the factors impacting the company's profitability and financial health.
Peer comparison
Dec 31, 2024