Leidos Holdings Inc (LDOS)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	1,827,000	621,000	1,088,000	1,146,000	962,000
Interest expense	US$ in thousands	-193,000	4,000	1,000	185,000	182,000
Interest coverage		—	155.25	1,088.00	6.19	5.29

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,827,000K ÷ $-193,000K
= —

The interest coverage ratio measures a company's ability to meet its interest obligations on its debt with its operating income. Looking at the data provided for Leidos Holdings Inc, we observe a fluctuation in the interest coverage ratio over the years:

- As of December 31, 2020, the interest coverage ratio was 5.29, indicating that the company's operating income was able to cover its interest expenses 5.29 times over.
- By December 31, 2021, the interest coverage ratio improved to 6.19, suggesting a better ability to meet interest obligations.
- The ratio increased significantly to 1,088.00 by December 31, 2022, reflecting an exceptionally strong ability to cover interest costs, potentially due to a significant increase in operating income or a significant decrease in interest expenses.
- However, by December 31, 2023, the interest coverage ratio decreased to 155.25, indicating a lower ability to cover interest expenses compared to the previous year but still at a relatively healthy level.
- Notably, there is no specific data available for December 31, 2024, represented as "—" which could imply that the data is not yet available or there might be a significant change in the company's financials.

Overall, based on the data provided, it appears that Leidos Holdings Inc has shown varying levels of ability to cover its interest expenses over the years, with some strong performances and slight fluctuations. This ratio is an essential indicator of the company's financial health and its ability to service its debt obligations.