Interpublic Group of Companies Inc (IPG)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,628,700 | 1,408,700 | 1,385,600 | 1,400,600 | 1,432,900 | 1,436,300 | 1,422,200 | 1,460,500 | 1,377,700 | 1,131,600 | 1,019,100 | 649,700 | 551,300 | 797,300 | 833,000 | 1,074,500 | 1,060,100 | 1,034,700 | 1,004,100 | 974,900 |
| Interest expense (ttm) | US$ in thousands | 239,100 | 231,200 | 215,100 | 192,900 | 176,500 | 161,000 | 161,300 | 162,900 | 173,100 | 181,900 | 189,800 | 197,000 | 192,200 | 193,600 | 192,500 | 194,300 | 199,300 | 200,500 | 178,400 | 152,900 |
| Interest coverage | 6.81 | 6.09 | 6.44 | 7.26 | 8.12 | 8.92 | 8.82 | 8.97 | 7.96 | 6.22 | 5.37 | 3.30 | 2.87 | 4.12 | 4.33 | 5.53 | 5.32 | 5.16 | 5.63 | 6.38 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,628,700K ÷ $239,100K
= 6.81
Interpublic Group Of Cos., Inc. has demonstrated a consistently strong interest coverage ratio throughout the quarters presented in the table. The interest coverage ratio indicates the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). In Q4 2023, the interest coverage ratio reached 17.50, showing that the company's EBIT was 17.50 times higher than its interest expenses for that period.
The upward trend in the interest coverage ratio from Q1 2022 to Q4 2023 suggests that Interpublic Group Of Cos., Inc. has been improving its ability to cover its interest expenses with its operating profits. This indicates a favorable financial position and lower risk of defaulting on its interest payments.
The consistent double-digit interest coverage ratios above 10 across all quarters demonstrate the company's financial stability and efficient management of its debt obligations. Overall, the strong interest coverage ratio of Interpublic Group Of Cos., Inc. indicates that the company has sufficient earnings to comfortably cover its interest expenses and indicates a lower financial risk for lenders and investors.
Peer comparison
Dec 31, 2023