FMC Corporation (FMC)
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 | 486,800 | 270,600 | 236,100 | 305,400 | 535,000 | 913,300 | 1,028,400 | 1,132,500 | 1,131,700 | 1,012,500 | 1,012,100 | 1,063,000 | 1,020,700 | 890,300 | 863,800 | 847,600 | 881,100 | 850,700 | 827,400 | 826,200 |
| Interest expense (ttm) | US$ in thousands | 235,800 | 240,700 | 246,600 | 247,500 | 237,200 | 225,300 | 202,500 | 173,300 | 151,800 | 140,000 | 131,300 | 128,600 | 131,100 | 132,300 | 134,700 | 142,800 | 151,200 | 159,900 | 166,000 | 164,800 |
| Interest coverage | 2.06 | 1.12 | 0.96 | 1.23 | 2.26 | 4.05 | 5.08 | 6.53 | 7.46 | 7.23 | 7.71 | 8.27 | 7.79 | 6.73 | 6.41 | 5.94 | 5.83 | 5.32 | 4.98 | 5.01 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $486,800K ÷ $235,800K
= 2.06
The interest coverage ratio of FMC Corporation has exhibited fluctuations over the years. The ratio has generally shown an increasing trend from 5.01 in March 2020 to a peak of 8.27 in March 2022. This indicates that the company's ability to cover its interest expenses with its earnings improved during this period.
However, from June 2022 onwards, the interest coverage ratio started to decline. It decreased to 5.08 in June 2023, followed by a sharper decline to 1.23 in March 2024. This suggests that FMC Corporation may be facing challenges in servicing its interest payments with its operating income.
The decreasing trend in the interest coverage ratio raises concerns about the company's financial health and its ability to meet its debt obligations. It may indicate a higher risk of default if the trend continues. FMC Corporation should closely monitor its interest coverage ratio and take appropriate measures to improve its financial position, such as increasing profitability or reducing debt levels.
Peer comparison
Dec 31, 2024