Kraft Heinz Co (KHC)
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 | 4,554,000 | 4,646,000 | 4,720,000 | 3,951,000 | 3,882,000 | 2,693,000 | 3,214,000 | 3,837,000 | 3,743,000 | 5,273,000 | 5,201,000 | 2,685,000 | 2,419,000 | 1,459,000 | 1,801,000 | 3,929,000 | 4,024,000 | -10,717,000 | -11,132,000 | -10,622,000 |
| Interest expense (ttm) | US$ in thousands | 912,000 | 900,000 | 900,000 | 906,000 | 921,000 | 1,308,000 | 1,495,000 | 1,874,000 | 2,047,000 | 1,771,000 | 1,670,000 | 1,499,000 | 1,394,000 | 1,392,000 | 1,476,000 | 1,350,000 | 1,361,000 | 1,360,000 | 1,288,000 | 1,288,000 |
| Interest coverage | 4.99 | 5.16 | 5.24 | 4.36 | 4.21 | 2.06 | 2.15 | 2.05 | 1.83 | 2.98 | 3.11 | 1.79 | 1.74 | 1.05 | 1.22 | 2.91 | 2.96 | -7.88 | -8.64 | -8.25 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,554,000K ÷ $912,000K
= 4.99
The interest coverage ratio for Kraft Heinz Co has exhibited variability over the periods presented. The ratio measures the company's ability to meet its interest obligations with operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Looking at the data, the interest coverage ratio has generally improved from negative figures in 2019 to positive levels in 2023, reaching a peak of 5.24 in June 2023. This indicates that the company's operating income was more than sufficient to cover its interest expenses during this period.
However, there are fluctuations in the ratio throughout the years, suggesting some inconsistency in the company's ability to cover its interest payments. The significant drop in the ratio in March 2021 and September 2022 to 1.74 and 2.06 respectively may raise concerns about the company's ability to meet its interest obligations with its operating income during those periods.
Overall, it is essential for investors and stakeholders to closely monitor Kraft Heinz Co's interest coverage ratio to assess the company's financial health and ability to manage its debt effectively.
Peer comparison
Dec 31, 2023