McCormick & Company Incorporated (MKC)
Interest coverage
| Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,181,900 | 1,175,900 | 1,123,800 | 1,105,100 | 1,063,300 | 1,017,500 | 1,072,100 | 1,001,400 | 999,700 | 1,004,300 | 962,000 | 1,052,800 | 1,084,600 | 1,087,300 | 1,096,000 | 1,102,000 | 1,057,900 | 1,085,600 | 1,069,100 | 1,022,300 |
| Interest expense (ttm) | US$ in thousands | 209,400 | 209,400 | 208,600 | 207,900 | 208,200 | 199,900 | 185,100 | 166,600 | 149,100 | 138,000 | 134,000 | 135,900 | 136,600 | 135,700 | 135,300 | 134,100 | 135,600 | 141,700 | 149,500 | 157,500 |
| Interest coverage | 5.64 | 5.62 | 5.39 | 5.32 | 5.11 | 5.09 | 5.79 | 6.01 | 6.70 | 7.28 | 7.18 | 7.75 | 7.94 | 8.01 | 8.10 | 8.22 | 7.80 | 7.66 | 7.15 | 6.49 |
November 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,181,900K ÷ $209,400K
= 5.64
The interest coverage ratio measures the company's ability to make interest payments on its debt using its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Looking at the data provided for McCormick & Company Incorporated, we observe fluctuations in the interest coverage ratio over time. The interest coverage ratio has generally remained above 5, indicating a healthy level of coverage for the company. Specifically, the ratio ranged from 6.49 in February 2020 to 5.64 in November 2024.
The trend shows an initial increase in the interest coverage ratio from around 6.49 in February 2020 to a peak of 8.22 in February 2021. Subsequently, there was a slight decline before stabilizing around 7.00 in 2022 and 2023.
It is worth noting that a gradual decrease is observed from May 2023 to November 2024, ending at 5.64. This downward trend may indicate that McCormick & Company Incorporated's ability to cover its interest payments slightly weakened during this period.
Overall, the interest coverage ratio data suggest that McCormick & Company Incorporated has maintained a relatively healthy ability to cover its interest expenses, although there was a slight decline in coverage towards the end of the period. It is crucial for investors and creditors to monitor this ratio over time to assess the company's financial health and its capacity to meet its debt obligations.