Newell Brands Inc (NWL)
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 | -260,000 | 392,000 | 1,016,000 | -727,000 | -628,000 |
| Interest expense | US$ in thousands | 283,000 | 235,000 | 256,000 | 274,000 | 303,000 |
| Interest coverage | -0.92 | 1.67 | 3.97 | -2.65 | -2.07 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-260,000K ÷ $283,000K
= -0.92
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to meet interest obligations.
For Newell Brands Inc, the interest coverage ratio has fluctuated over the past five years. In 2023, the ratio dropped to 1.24, indicating a decrease in the company's ability to cover its interest payments from its operating income. This may raise concerns about the company's financial health and its ability to service its debt obligations.
In 2022, the interest coverage ratio improved to 3.41, showing a stronger ability to meet interest expenses compared to the previous year. The ratio further increased to 3.99 in 2021, reflecting an even better ability to cover interest payments.
In 2020, the interest coverage ratio was 3.25, which was lower than in 2021 but still indicated a good level of coverage. In 2019, the ratio was 2.53, also showing a reasonable ability to meet interest obligations.
Overall, it is important for investors and stakeholders to monitor Newell Brands Inc's interest coverage ratio closely to assess the company's financial risk and ability to manage its debt effectively.
Peer comparison
Dec 31, 2023