Altria Group (MO)
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 | 12,077,000 | 8,517,000 | 5,012,000 | 8,126,000 | 2,093,000 |
| Interest expense | US$ in thousands | 1,149,000 | 1,128,000 | 1,188,000 | 1,223,000 | 1,322,000 |
| Interest coverage | 10.51 | 7.55 | 4.22 | 6.64 | 1.58 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $12,077,000K ÷ $1,149,000K
= 10.51
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of covering its interest expenses.
Analyzing the trend in Altria Group Inc.'s interest coverage ratio over the past five years, we observe the following:
- In 2023, the interest coverage ratio was 11.92, a significant improvement from the previous year's ratio of 7.82 in 2022.
- The ratio had seen fluctuations in the years leading up to 2023, with a notable increase in 2020 (8.90) compared to 2019 (9.54).
- Despite the fluctuations, the interest coverage ratio has generally shown an upward trend, with the highest ratio observed in 2023.
Overall, the improving trend in Altria Group Inc.'s interest coverage ratio suggests that the company's earnings are increasingly sufficient to cover its interest expenses, indicating a strengthening financial position and reduced risk of default on debt obligations.
Peer comparison
Dec 31, 2023