Kellanova (K)

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	1,505,000	1,766,000	1,652,000	1,558,000	1,635,000	1,629,000	1,708,000	1,797,000	1,752,000	1,808,000	1,772,000	1,774,000	1,761,000	1,736,000	1,588,000	1,479,000	1,401,000	1,367,000	1,500,000	1,577,000
Interest expense (ttm)	US$ in thousands	303,000	314,000	270,000	242,000	218,000	200,000	216,000	220,000	223,000	257,000	265,000	276,000	281,000	259,000	268,000	274,000	284,000	295,000	295,000	292,000
Interest coverage		4.97	5.62	6.12	6.44	7.50	8.14	7.91	8.17	7.86	7.04	6.69	6.43	6.27	6.70	5.93	5.40	4.93	4.63	5.08	5.40

December 31, 2023 calculation

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

The interest coverage ratio for Kellanova has shown a fluctuating trend over the past few quarters. The ratio has ranged from a low of 4.63 to a high of 8.17. Generally, a higher interest coverage ratio indicates that a company is more capable of meeting its interest obligations from its earnings.

In the recent quarters, the interest coverage ratio has been above 5, which is generally considered acceptable. This suggests that Kellanova has been generating sufficient operating income to cover its interest expenses comfortably.

However, it is important to note the gradual decline in the interest coverage ratio from the peak of 8.17 in March 2022 to the latest ratio of 4.97 in December 2023. This decreasing trend may indicate a potential strain on Kellanova's financial performance in meeting its interest obligations.

Therefore, it would be prudent for stakeholders to closely monitor Kellanova's financial performance and cash flow management to ensure that the company can continue to meet its debt obligations effectively.