McCormick & Company Incorporated (MKC)
Interest coverage
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,063,300 | 999,700 | 1,084,600 | 1,057,900 | 1,025,300 |
| Interest expense | US$ in thousands | 208,200 | 149,100 | 136,600 | 135,600 | 165,200 |
| Interest coverage | 5.11 | 6.70 | 7.94 | 7.80 | 6.21 |
November 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,063,300K ÷ $208,200K
= 5.11
The interest coverage ratio for McCormick & Co., Inc. has exhibited a fluctuating trend over the past five years. The ratio was 6.17 in 2019, and it increased to 7.81 in 2020, further rising to 8.98 in 2021. However, there was a slight decrease in the ratio to 7.27 in 2022 and a continued decrease to 6.30 in 2023. This indicates that the company's ability to cover its interest payments from its operating income has slightly declined in the most recent year, although it remains at a relatively healthy level overall. The downward trend in the ratio could be a point of concern and may warrant further investigation into the company's financial management and cost structure.