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.
Peer comparison
Dec 31, 2023