Medtronic PLC (MDT)
Interest coverage
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,556,000 | 5,528,000 | 5,778,000 | 5,974,000 | 6,847,000 |
| Interest expense | US$ in thousands | 719,000 | 719,000 | 636,000 | 636,000 | 553,000 |
| Interest coverage | 7.73 | 7.69 | 9.08 | 9.39 | 12.38 |
April 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,556,000K ÷ $719,000K
= 7.73
To analyze Medtronic PLC's interest coverage, we observe a declining trend over the past few years. The interest coverage ratio, which measures the company's ability to cover interest expenses with operating income, decreased from 12.38 in April 2022 to 7.73 in April 2024.
This declining trend suggests that Medtronic PLC may be facing challenges in generating sufficient operating income to cover its interest expenses. A higher interest coverage ratio is generally preferred as it indicates a stronger ability to meet interest obligations.
Given the decreasing trend in the interest coverage ratio, investors and creditors may need to closely monitor Medtronic PLC's financial performance and liquidity position to ensure the company can meet its debt obligations in the future.
Peer comparison
Apr 30, 2024