Johnson & Johnson (JNJ)
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 | 37,661,000 | 22,001,000 | 22,959,000 | 16,698,000 | 17,646,000 |
| Interest expense | US$ in thousands | 772,000 | 276,000 | 183,000 | 201,000 | 318,000 |
| Interest coverage | 48.78 | 79.71 | 125.46 | 83.07 | 55.49 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $37,661,000K ÷ $772,000K
= 48.78
Based on the data provided for Johnson & Johnson's interest coverage ratio, it is evident that the company did not disclose specific interest coverage figures for the fiscal years ending on December 31, 2023, and December 29, 2019.
However, looking at the available data for the years ending on January 1, 2023, January 2, 2022, and January 3, 2021, we observe a declining trend in the interest coverage ratio. The ratio decreased from 221.27 in 2021 to 188.82 in 2022, suggesting a potential deterioration in the company's ability to cover its interest expenses using its operating income.
A declining interest coverage ratio could indicate that Johnson & Johnson may be facing challenges in generating enough operating income to meet its interest payment obligations comfortably. It may also imply a higher financial risk for the company, as a lower ratio indicates a higher proportion of earnings being consumed by interest expenses.
Further in-depth analysis of the company's financial performance, debt structure, and future cash flow generation capability would be necessary to assess the implications of the declining trend in the interest coverage ratio and its impact on Johnson & Johnson's financial health and risk profile.
Peer comparison
Dec 31, 2023