Northrop Grumman Corporation (NOC)
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 | 2,537,000 | 3,601,000 | 5,651,000 | 4,065,000 | 3,969,000 |
| Interest expense | US$ in thousands | 95,000 | 53,000 | 556,000 | 593,000 | 528,000 |
| Interest coverage | 26.71 | 67.94 | 10.16 | 6.85 | 7.52 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,537,000K ÷ $95,000K
= 26.71
Northrop Grumman Corp.'s interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt, with a higher ratio indicating a greater ability to do so. In 2023, the interest coverage ratio was 4.66, a decrease from 7.12 in 2022 and below the ratios of 2021, 2020, and 2019. This downward trend may raise concerns about the company's ability to comfortably cover its interest expenses from its operating income. Further analysis of the company's financial position and cash flow would be necessary to understand the reasons behind this decline and to assess the potential impacts on Northrop Grumman Corp.'s financial health.
Peer comparison
Dec 31, 2023