Kimberly-Clark Corporation (KMB)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,510,000 | 2,711,000 | 2,549,000 | 3,280,000 | 2,994,000 |
| Interest expense | US$ in thousands | 293,000 | 282,000 | 256,000 | 252,000 | 261,000 |
| Interest coverage | 8.57 | 9.61 | 9.96 | 13.02 | 11.47 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,510,000K ÷ $293,000K
= 8.57
The interest coverage ratio indicates Kimberly-Clark Corp.'s ability to meet its interest obligations using its operating income. The trend of the interest coverage ratio over the past five years shows a generally positive picture. It improved substantially from 2019 to 2020, decreased slightly in 2021, and then showed a notable increase in 2022 and 2023.
The consistent double-digit values of the interest coverage ratio indicate that Kimberly-Clark Corp. has been comfortably able to cover its interest expenses with its operating earnings over the years. This suggests that the company has a strong ability to service its debt obligations and is less vulnerable to financial distress resulting from an inability to pay interest.
The significant fluctuations in the interest coverage ratio from year to year should be further investigated to understand the underlying factors driving these changes, such as changes in operating income or interest expenses. Overall, the trend in Kimberly-Clark Corp.'s interest coverage ratio reflects a stable financial position with a strong capacity to meet its interest payments.
Peer comparison
Dec 31, 2023