Lockheed Martin Corporation (LMT)
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 | 9,014,000 | 7,303,000 | 8,119,000 | 8,771,000 | 7,894,000 |
| Interest expense | US$ in thousands | 916,000 | 623,000 | 569,000 | 591,000 | 653,000 |
| Interest coverage | 9.84 | 11.72 | 14.27 | 14.84 | 12.09 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $9,014,000K ÷ $916,000K
= 9.84
Lockheed Martin Corp.'s interest coverage, a measure of its ability to meet interest payments on outstanding debt, has exhibited a declining trend over the last five years. The interest coverage ratio decreased from 16.16 in 2021 to 9.36 in 2023, indicating a potential decrease in the company's ability to cover interest expenses from its earnings. This trend may reflect either an increase in the company's interest expenses or a decrease in its earnings before interest and taxes (EBIT). It is important for investors and creditors to monitor this ratio closely to assess the company's financial risk and its ability to service its debt obligations.