Laboratory Corporation of America Holdings (LH)
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 | 806,100 | 1,761,400 | 3,336,500 | 2,425,600 | 1,344,500 |
| Interest expense | US$ in thousands | 199,600 | 179,800 | 212,100 | 207,400 | 240,700 |
| Interest coverage | 4.04 | 9.80 | 15.73 | 11.70 | 5.59 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $806,100K ÷ $199,600K
= 4.04
The interest coverage ratio of Laboratory Corp. Of America Holdings has fluctuated over the past five years. In 2023, the interest coverage ratio was 5.62, which indicates that the company's operating income was able to cover its interest expense 5.62 times. This ratio was lower compared to the previous year, suggesting a decrease in the company's ability to cover its interest expenses with its operating income.
In 2022, the interest coverage ratio improved significantly to 11.84, reflecting a strong ability to cover interest expenses. The ratio continued to show a strong performance in 2021 at 15.70, indicating a robust financial position with a high capacity to meet interest payments. Similarly, in 2020, the interest coverage ratio was 14.23, implying a strong ability to service debt obligations with operating profits.
However, there was a decline in the interest coverage ratio in 2019 to 5.79, indicating that the company's ability to cover interest expenses decreased compared to the previous year. Overall, the trend in interest coverage ratios suggests variability in the company's ability to meet interest obligations with operating income during the period analyzed.
Peer comparison
Dec 31, 2023