The Coca-Cola Company (KO)

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	14,490,000	14,387,000	14,123,000	13,330,000	12,539,000	12,849,000	12,494,000	14,422,000	13,989,000	13,553,000	13,101,000	11,177,000	11,165,000	11,144,000	11,632,000	12,405,000	11,667,000	10,196,000	9,519,000	9,429,000
Interest expense (ttm)	US$ in thousands	1,527,000	1,418,000	1,248,000	1,072,000	882,000	743,000	755,000	1,337,000	1,597,000	1,742,000	2,192,000	1,686,000	1,437,000	1,362,000	932,000	894,000	946,000	964,000	948,000	959,000
Interest coverage		9.49	10.15	11.32	12.43	14.22	17.29	16.55	10.79	8.76	7.78	5.98	6.63	7.77	8.18	12.48	13.88	12.33	10.58	10.04	9.83

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,490,000K ÷ $1,527,000K
= 9.49

Coca-Cola Co's interest coverage ratio, a key indicator of the company's ability to meet interest payments on its debt obligations, has shown a fluctuating trend over the past eight quarters.

The interest coverage ratio for Q4 2023 was 24.12, displaying a slight decline from the previous quarter's ratio of 23.14. Despite this decrease, the company's interest coverage remains at a healthy level, indicating that Coca-Cola Co has more than enough earnings to cover its interest expenses.

Looking further back, the interest coverage ratios for the past two years demonstrate a generally strong financial position for Coca-Cola Co. The ratio reached its highest point in Q3 2022 at 36.66, showing a notable ability to cover interest payments with operating income. However, there was a significant drop in Q1 2022, with the ratio falling to 12.55, potentially raising some concerns about the company's ability to meet interest obligations during that period.

Overall, while there have been fluctuations in Coca-Cola Co's interest coverage ratio over the past two years, the ratios mostly suggest that the company has maintained a solid financial footing and has been able to consistently meet its interest payment obligations. Further monitoring of this ratio will be important to ensure the company's financial health and stability.