Kellanova (K)
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 | 1,965,000 | 1,505,000 | 1,103,000 | 1,657,000 | 1,882,000 |
| Interest expense | US$ in thousands | 311,000 | 303,000 | 201,000 | 205,000 | 281,000 |
| Interest coverage | 6.32 | 4.97 | 5.49 | 8.08 | 6.70 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,965,000K ÷ $311,000K
= 6.32
The interest coverage ratio of Kellanova has fluctuated over the years based on the provided data. As of December 31, 2020, the interest coverage was 6.70, indicating that the company generated 6.70 times more operating income than it needed to cover its interest expenses.
By December 31, 2021, the interest coverage improved to 8.08, showcasing the company's ability to comfortably meet its interest obligations with operating income.
However, there was a decrease in the interest coverage ratio by December 31, 2022, when it dropped to 5.49. This suggests that the company may have experienced a decrease in operating income relative to its interest expenses.
The trend continued in the following years, with Kellanova's interest coverage ratio declining to 4.97 by December 31, 2023, indicating a potential strain on the company's ability to cover its interest payments from its operating profits.
The interest coverage ratio slightly increased to 6.32 by December 31, 2024. While the uptick is positive, Kellanova may still need to focus on improving its operating income to ensure it can comfortably meet its interest obligations in the future.
Peer comparison
Dec 31, 2024