Marathon Petroleum Corp (MPC)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,731,000 | 15,339,000 | 19,750,000 | 4,117,000 | -12,279,000 |
| Interest expense | US$ in thousands | 1,308,000 | 1,277,000 | 1,216,000 | 1,300,000 | 1,372,000 |
| Interest coverage | 4.38 | 12.01 | 16.24 | 3.17 | -8.95 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,731,000K ÷ $1,308,000K
= 4.38
The interest coverage ratio for Marathon Petroleum Corp has shown significant fluctuations over the past five years. In December 2020, the company's interest coverage ratio was -8.95, indicating that its operating income was insufficient to cover its interest expenses. However, by December 2021, the ratio improved to 3.17, suggesting that the company's ability to cover interest payments had increased, though it was still relatively low.
In the following years, Marathon Petroleum Corp's interest coverage continued to strengthen significantly. By December 2022, the ratio had surged to 16.24, signaling a substantial improvement in the company's capacity to meet its interest obligations comfortably. This positive trend continued into December 2023, with a still strong interest coverage ratio of 12.01.
However, by December 2024, there was a slight decrease in the interest coverage ratio to 4.38, indicating a potential decrease in the company's ability to cover interest expenses compared to the previous year. While the ratio remained above 1, indicating that the company's operating income still exceeded its interest expenses, investors should monitor this trend to ensure the company's ability to manage its debt obligations efficiently.
Peer comparison
Dec 31, 2024