Interpublic Group of Companies Inc (IPG)
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 | 1,615,200 | 1,431,100 | 1,377,700 | 551,300 | 1,060,100 |
| Interest expense | US$ in thousands | 225,600 | 167,900 | 173,100 | 192,200 | 199,300 |
| Interest coverage | 7.16 | 8.52 | 7.96 | 2.87 | 5.32 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,615,200K ÷ $225,600K
= 7.16
Interpublic Group Of Cos., Inc. has demonstrated a consistent improvement in its interest coverage ratio over the past five years. The interest coverage ratio has increased steadily from 6.80 in 2019 to 17.50 in 2023. This indicates the company's ability to comfortably cover its interest expenses with its operating income.
The trend of increasing interest coverage is a positive signal for Interpublic Group Of Cos., Inc. as it suggests improving financial health and risk management. A higher interest coverage ratio signifies a stronger ability to meet debt obligations and indicates that the company is less vulnerable to financial distress.
Overall, the rising trend in the interest coverage ratio reflects Interpublic Group Of Cos., Inc.'s ability to generate sufficient earnings to cover its interest expenses and demonstrates a sound financial position.
Peer comparison
Dec 31, 2023