Kellanova (K)

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	1,505,000	1,635,000	1,752,000	1,761,000	1,401,000
Interest expense	US$ in thousands	303,000	218,000	223,000	281,000	284,000
Interest coverage		4.97	7.50	7.86	6.27	4.93

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,505,000K ÷ $303,000K
= 4.97

Kellanova's interest coverage ratio has shown fluctuating trends over the past five years. The ratio has ranged from a low of 4.93 in 2019 to a high of 7.86 in 2021. This ratio indicates the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio suggests that the company is more capable of servicing its debt with its earnings.

In 2023, Kellanova's interest coverage ratio decreased to 4.97 from 7.50 in 2022. This decline may raise concerns about the company's ability to cover its interest expenses with its operating income. It is important for investors and creditors to monitor this ratio closely as a declining trend could indicate potential financial distress or difficulty in meeting debt obligations.

Overall, while Kellanova's interest coverage ratio has shown some variability over the years, it is essential for the company to maintain a healthy level of coverage to ensure financial stability and viability in the long term.