McKesson Corporation (MCK)
Interest coverage
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,624,000 | 4,032,000 | 4,878,000 | 2,106,000 | -4,817,000 |
| Interest expense | US$ in thousands | 265,000 | 252,000 | 248,000 | 178,000 | 217,000 |
| Interest coverage | 17.45 | 16.00 | 19.67 | 11.83 | -22.20 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,624,000K ÷ $265,000K
= 17.45
Based on the data provided, McKesson Corporation's interest coverage ratio has shown significant variability over the past five years. In March 2021, the interest coverage ratio was negative, indicating that the company's earnings were not sufficient to cover its interest expenses. However, there has been a positive turnaround in subsequent years, with the interest coverage ratio improving to 11.83 in March 2022, 19.67 in March 2023, 16.00 in March 2024, and 17.45 in March 2025.
This improvement suggests that McKesson's ability to meet its interest obligations has strengthened over the years, reflecting better profitability and financial health. A higher interest coverage ratio is usually seen as a positive indicator, as it indicates the company has more earnings available to cover its interest expenses. However, it is important to monitor this ratio consistently to ensure the company remains financially sound and capable of meeting its debt obligations.
Peer comparison
Mar 31, 2025