Kraft Heinz Co (KHC)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,766,000 | 2,957,000 | 3,706,000 | 4,529,000 | 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 |
| Interest expense (ttm) | US$ in thousands | 912,000 | 914,000 | 912,000 | 911,000 | 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 |
| Interest coverage | 1.94 | 3.24 | 4.06 | 4.97 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,766,000K ÷ $912,000K
= 1.94
Kraft Heinz Co's interest coverage ratio, which measures the company's ability to meet its interest obligations with its operating income, displayed fluctuations over the period under review. The interest coverage ratio ranged from a low of 1.05 in September 2020 to a high of 5.24 in June 2023, indicating varying levels of financial stability.
The trend in Kraft Heinz Co's interest coverage ratio shows some volatility, with periods of improvement followed by declines. Notably, the ratio improved significantly from September 2020 to June 2023, indicating the company's ability to generate sufficient operating income to cover its interest expenses comfortably during this period.
However, there were periods where the interest coverage ratio decreased, such as in the second half of 2020 and late 2022 to early 2024, suggesting potential challenges in meeting interest obligations with operating income during those intervals. The interest coverage ratio decreased below 2.0 in some quarters, signaling a lower margin of safety and potentially higher financial risk.
Overall, while Kraft Heinz Co's interest coverage ratio experienced fluctuations, it is crucial to monitor the trend closely to assess the company's ability to manage its debt and ensure financial sustainability.
Peer comparison
Dec 31, 2024