Marathon Petroleum Corp (MPC)
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 | 14,514,000 | 16,858,000 | 18,791,000 | 23,814,000 | 21,469,000 | 18,508,000 | 13,162,000 | 5,799,000 | 4,300,000 | 2,912,000 | 515,000 | 125,000 | -12,247,000 | -12,079,000 | -9,342,000 | -8,219,000 | 4,462,000 | 5,921,000 | 5,644,000 | 5,657,000 |
| Interest expense (ttm) | US$ in thousands | 1,302,000 | 1,310,000 | 1,293,000 | 1,275,000 | 1,246,000 | 1,226,000 | 1,246,000 | 1,265,000 | 1,331,000 | 1,363,000 | 1,394,000 | 1,423,000 | 1,416,000 | 1,374,000 | 1,355,000 | 1,345,000 | 1,316,000 | 1,325,000 | 1,211,000 | 1,094,000 |
| Interest coverage | 11.15 | 12.87 | 14.53 | 18.68 | 17.23 | 15.10 | 10.56 | 4.58 | 3.23 | 2.14 | 0.37 | 0.09 | -8.65 | -8.79 | -6.89 | -6.11 | 3.39 | 4.47 | 4.66 | 5.17 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,514,000K ÷ $1,302,000K
= 11.15
Interest coverage measures a company's ability to meet its interest obligations from its operating income. In the case of Marathon Petroleum Corp, the trend of interest coverage over the past eight quarters shows a generally positive performance.
During Q4 2023, the interest coverage ratio stood at 19.45, indicating that the company generated operating income almost 19.45 times greater than its interest expenses for that quarter. The Q4 2023 ratio was slightly lower than the previous quarter but still at a healthy level.
Similarly, in Q3 and Q2 2023, the interest coverage ratios were 21.94 and 21.42, respectively, demonstrating a strong ability to cover interest payments. This trend continued into Q1 2023 with an interest coverage ratio of 24.93, showing the company's robust financial position.
Comparing to the same quarters in the previous year, Q4 2022, and Q3 2022 had interest coverage ratios of 20.33 and 15.79, respectively, indicating improvements in covering interest expenses. However, the interest coverage ratio significantly dropped in Q2 2022 and Q1 2022 to 11.25 and 4.82, respectively, suggesting a temporary strain on meeting interest obligations.
Overall, Marathon Petroleum Corp's interest coverage has shown a positive trend, reflecting the company's ability to generate sufficient operating income to cover its interest expenses. A high interest coverage ratio indicates the company is in a good financial position to meet its debt obligations.
Peer comparison
Dec 31, 2023