Laboratory Corporation of America Holdings (LH)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,166,700 | 821,100 | 849,100 | 822,600 | 806,700 | 1,072,200 | 1,220,800 | 1,425,300 | 1,779,000 | 2,340,600 | 2,713,200 | 2,948,500 | 3,336,500 | 3,898,700 | 4,087,000 | 3,708,400 | 2,425,600 | 1,492,000 | 303,500 | 282,600 |
| Interest expense (ttm) | US$ in thousands | 208,300 | 193,700 | 193,600 | 195,800 | 199,600 | 200,400 | 196,400 | 188,900 | 180,400 | 173,900 | 169,800 | 205,800 | 212,100 | 217,300 | 226,500 | 200,900 | 207,400 | 223,500 | 232,600 | 239,000 |
| Interest coverage | 5.60 | 4.24 | 4.39 | 4.20 | 4.04 | 5.35 | 6.22 | 7.55 | 9.86 | 13.46 | 15.98 | 14.33 | 15.73 | 17.94 | 18.04 | 18.46 | 11.70 | 6.68 | 1.30 | 1.18 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,166,700K ÷ $208,300K
= 5.60
The interest coverage ratio of Laboratory Corporation of America Holdings has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The ratio indicates the company's ability to meet its interest obligations from its operating income.
The data reveals that the interest coverage ratio ranged from a low of 1.18 on March 31, 2020, to a high of 18.46 on March 31, 2021. This indicates a significant improvement in the company's ability to cover its interest expenses.
From June 30, 2021, to December 31, 2024, the interest coverage ratio showed a declining trend, indicating a decrease in the company's ability to cover its interest payments comfortably. This decline may raise concerns about the company's financial health and its ability to service its debt obligations in the long run.
The fluctuations in the interest coverage ratio suggest that Laboratory Corporation of America Holdings may have experienced changes in its operating performance, profitability, or debt levels during the period under consideration. It is important for investors and stakeholders to closely monitor these ratios to assess the company's financial stability and ability to manage its debt effectively.
Peer comparison
Dec 31, 2024