ManpowerGroup Inc (MAN)
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 | 255,800 | 581,700 | 585,400 | 187,600 | 644,900 |
| Interest expense | US$ in thousands | 79,700 | 46,900 | 38,800 | 43,300 | 44,400 |
| Interest coverage | 3.21 | 12.40 | 15.09 | 4.33 | 14.52 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $255,800K ÷ $79,700K
= 3.21
The interest coverage ratio for ManpowerGroup has exhibited fluctuations over the past five years. In 2023, the interest coverage ratio stands at 6.83, a decrease from the previous year's level of 20.06. This implies that ManpowerGroup's ability to cover its interest expenses with operating income has weakened significantly. However, when compared to 2020 and 2019, the interest coverage ratio remains relatively stable.
The significant decline in the interest coverage ratio from 2022 to 2023 raises concerns about the company's financial health and its ability to meet interest obligations. Investors and lenders may view this decrease as a red flag, signaling potential financial strain. It is crucial for ManpowerGroup to closely monitor its ability to generate sufficient earnings to cover interest expenses in the future to maintain financial stability.
Peer comparison
Dec 31, 2023