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.
Peer comparison
Dec 31, 2023