Leidos Holdings Inc (LDOS)
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 | 621,000 | 1,088,000 | 1,146,000 | 962,000 | 1,010,000 |
| Interest expense | US$ in thousands | 4,000 | 1,000 | 185,000 | 182,000 | 147,000 |
| Interest coverage | 155.25 | 1,088.00 | 6.19 | 5.29 | 6.87 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $621,000K ÷ $4,000K
= 155.25
Leidos Holdings Inc's interest coverage ratio has shown significant fluctuations over the past five years, as indicated by the data provided. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
In 2023, Leidos Holdings Inc's interest coverage ratio stood at 155.25, reflecting a substantial increase from the previous year. This significant improvement suggests that the company's earnings are more than sufficient to cover its interest expenses, indicating a strong financial position in terms of servicing its debt.
However, the interest coverage ratio experienced a sharp decline in 2022, dropping to 1,088.00. While this might seem unusually high and potentially a result of special circumstances affecting the numerator or denominator, further investigation would be necessary to confirm this anomaly.
In 2021, the interest coverage ratio was relatively low at 6.19, indicating that the company's earnings were just over six times its interest expenses. There was a slight improvement in 2020 compared to the previous year, with the ratio reaching 5.29. Similarly, in 2019, Leidos Holdings Inc's interest coverage ratio was 6.87, showing a reasonable ability to cover its interest payments.
Overall, the fluctuation in Leidos Holdings Inc's interest coverage ratio over the past five years suggests varying levels of financial stability and debt-servicing capacity. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's ability to meet its interest obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023