Kraft Heinz Co (KHC)
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 | 1,766,000 | 4,554,000 | 3,882,000 | 3,743,000 | 2,419,000 |
| Interest expense | US$ in thousands | 912,000 | 912,000 | 921,000 | 2,047,000 | 1,394,000 |
| Interest coverage | 1.94 | 4.99 | 4.21 | 1.83 | 1.74 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,766,000K ÷ $912,000K
= 1.94
The interest coverage ratio for Kraft Heinz Co has shown fluctuations over the past five years. As of December 31, 2020, the ratio stood at 1.74, indicating that the company's ability to cover its interest expenses with its earnings was limited. However, in the following year, the interest coverage ratio improved slightly to 1.83.
Significant improvement was seen in the years 2022 and 2023, with the interest coverage ratios rising to 4.21 and 4.99, respectively. This surge in the ratio suggests that Kraft Heinz Co had a better capacity to meet its interest obligations from its operating earnings during these years.
However, by December 31, 2024, the interest coverage ratio dropped to 1.94. This decrease may indicate a potential reduction in the company's ability to comfortably cover its interest expenses with its operating income.
Overall, the trend in Kraft Heinz Co's interest coverage ratio reflects variations in its ability to service its debt obligations with its earnings over the five-year period, with notable improvements in some years and a slight decline in others.
Peer comparison
Dec 31, 2024