Ingredion Incorporated (INGR)
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 | 970,000 | 953,000 | 763,000 | 322,000 | 588,000 |
| Interest expense | US$ in thousands | 39,000 | 114,000 | 99,000 | 74,000 | 81,000 |
| Interest coverage | 24.87 | 8.36 | 7.71 | 4.35 | 7.26 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $970,000K ÷ $39,000K
= 24.87
The interest coverage ratio measures a company's ability to meet its interest payment obligations on its outstanding debt. A higher ratio indicates a healthier financial position as the company can easily cover its interest expenses.
For Ingredion Incorporated, the interest coverage ratio has shown variability over the years based on the provided data:
1. As of December 31, 2020, the interest coverage ratio was 7.26, indicating that the company generated 7.26 times the amount needed to cover its interest expenses for that period.
2. By December 31, 2021, the interest coverage ratio decreased to 4.35, signaling a lower ability to cover interest payments. This decline may raise concerns about the company's financial health and its ability to manage debt obligations.
3. However, there was an improvement in the interest coverage ratio by December 31, 2022, reaching 7.71. This suggests a recovery in the company's capacity to service its debt and meet interest payments.
4. The trend continued positively with the interest coverage ratio further increasing to 8.36 by December 31, 2023, indicating a more robust ability to handle interest expenses.
5. By December 31, 2024, the interest coverage ratio significantly surged to 24.87, reflecting a substantial improvement and a strong financial position for Ingredion Incorporated. This high ratio implies that the company has a significant cushion to cover its interest obligations comfortably.
Overall, despite some fluctuations in the interest coverage ratio, Ingredion's trend towards higher values in recent years suggests an improving ability to manage debt and interest payments, culminating in a notably strong performance by the end of 2024. It is essential for investors and stakeholders to monitor these ratios to assess the company's financial stability and its capacity to service its debt commitments effectively.
Peer comparison
Dec 31, 2024