Altria Group (MO)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 11,547,000 | 11,569,000 | 11,592,000 | 11,792,000 | 11,919,000 | 11,834,000 | 11,673,000 | 11,754,000 | 11,560,000 | 11,408,000 | 11,617,000 | 11,227,000 | 10,873,000 | 10,719,000 | 10,503,000 | 10,424,000 | 10,326,000 | 9,643,000 | 9,256,000 | 9,037,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 1,280,000 | 1,151,000 | 1,017,000 | 883,000 |
| Interest coverage | 11.68 | 10.98 | 11.01 | 10.96 | 10.57 | 10.28 | 10.19 | 10.12 | 9.73 | 9.63 | 9.45 | 9.04 | 8.99 | 9.05 | 9.00 | 8.90 | 8.07 | 8.38 | 9.10 | 10.23 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $11,547,000K ÷ $989,000K
= 11.68
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of servicing its debt obligations.
Analyzing Altria Group Inc.'s interest coverage over the past eight quarters reveals fluctuations in the company's ability to cover its interest expenses. In the most recent quarter, Q4 2023, the interest coverage stood at 11.92, a robust figure indicating a significant buffer between Altria's operating income and its interest expenses.
The trend over the previous quarters shows relative stability in interest coverage, generally maintaining above 7. This indicates consistent ability to cover interest expenses comfortably, with Q3 and Q2 2023 also exhibiting strong ratios of 11.93 and 9.39, respectively.
However, in Q1 2023 and Q4 2022, the interest coverage ratios dipped to 7.99 and 7.82, respectively, but these figures still indicate reasonable coverage of interest expenses.
A more noticeable decline in interest coverage occurred in Q2 2022, with the ratio dropping to 3.87, reflecting a weaker ability to cover interest expenses with operating income. This could be a point of concern and warrants further investigation into the factors contributing to this decline.
Overall, Altria Group Inc.'s interest coverage has generally been on a positive trajectory, with the most recent quarters showing strong ratios. However, periodic fluctuations highlight the importance of continuous monitoring of the company's financial health and its ability to meet debt obligations.
Peer comparison
Dec 31, 2023