Altria Group (MO)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 14,782,000 | 15,416,960 | 15,303,960 | 12,989,960 | 12,704,960 | 11,976,000 | 9,474,000 | 9,608,000 | 9,782,000 | 9,629,000 | 5,915,000 | 5,958,000 | 5,849,000 | 1,939,000 | 4,961,000 | 4,517,000 | 4,521,000 | 4,627,000 | 7,617,000 | 7,623,000 |
| Interest expense (ttm) | US$ in thousands | 1,124,000 | 1,013,000 | 1,018,000 | 1,014,000 | 989,000 | 1,054,000 | 1,053,000 | 1,076,000 | 1,128,000 | 1,151,000 | 1,146,000 | 1,161,000 | 1,188,000 | 1,185,000 | 1,229,000 | 1,242,000 | 1,209,000 | 1,184,000 | 1,167,000 | 1,171,000 |
| Interest coverage | 13.15 | 15.22 | 15.03 | 12.81 | 12.85 | 11.36 | 9.00 | 8.93 | 8.67 | 8.37 | 5.16 | 5.13 | 4.92 | 1.64 | 4.04 | 3.64 | 3.74 | 3.91 | 6.53 | 6.51 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,782,000K ÷ $1,124,000K
= 13.15
Altria Group's interest coverage ratio, which measures the company's ability to cover its interest expenses with operating income, has shown fluctuations over the past few years. The interest coverage ratio stood at 6.51 in March 2020 and June 2020, indicating that the company generated enough operating income to cover its interest payments more than six times.
However, there was a slight decline in the interest coverage ratio to 3.91 in September 2020 and further to 3.74 in December 2020. This may raise concerns about the company's ability to meet its interest obligations comfortably.
In the subsequent quarters, the interest coverage ratio fluctuated but showed an overall improving trend. By December 2021, the ratio increased to 4.92 and continued to rise to 15.22 by September 2024. These higher ratios imply that Altria Group was able to cover its interest expenses significantly more than it owed in operating income, reflecting a strong financial position.
The consistent improvement in the interest coverage ratio from 2021 to 2024 indicates an increasing ability to meet interest obligations, reducing the financial risk associated with debt. It suggests that Altria Group has been effectively managing its interest expenses relative to its operating income during this period.
Peer comparison
Dec 31, 2024