Corning Incorporated (GLW)
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 | 890,000 | 1,438,000 | 2,112,000 | 509,000 | 1,306,000 |
| Interest expense | US$ in thousands | 40,000 | 48,000 | 44,000 | 65,000 | 54,000 |
| Interest coverage | 22.25 | 29.96 | 48.00 | 7.83 | 24.19 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $890,000K ÷ $40,000K
= 22.25
Interest coverage ratio measures a company's ability to pay the interest on its outstanding debt using its operating income. A higher interest coverage ratio is generally favorable as it indicates that the company is more capable of servicing its debt obligations.
Looking at the trend in Corning, Inc.'s interest coverage ratio over the past five years, there seems to be some variability. In 2023, the interest coverage ratio decreased to 3.06 from 5.19 in 2022, which could raise concerns about the company's ability to cover its interest expenses using its operating income. However, it is important to note that the ratio is still above 1, indicating that the company's operating income is sufficient to cover its interest payments.
The highest interest coverage ratio in the period was observed in 2021 at 7.43, suggesting a strong ability to meet the interest payments comfortably. On the other hand, the lowest ratio was in 2020 at 1.85, which could indicate a potential financial strain in that year.
Overall, it would be beneficial for stakeholders to closely monitor Corning, Inc.'s interest coverage ratio in conjunction with other financial metrics to assess the company's financial health and debt servicing capabilities effectively. Further analysis and understanding of the company's operating performance and capital structure could provide additional insights into the factors driving the fluctuations in the interest coverage ratio over the years.
Peer comparison
Dec 31, 2023