Newell Brands Inc (NWL)
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 | 35,000 | -85,000 | 826,000 | 1,121,000 | -725,000 |
| Interest expense | US$ in thousands | 295,000 | 283,000 | 235,000 | 256,000 | 274,000 |
| Interest coverage | 0.12 | -0.30 | 3.51 | 4.38 | -2.65 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $35,000K ÷ $295,000K
= 0.12
To analyze Newell Brands Inc's interest coverage based on the provided data:
1. December 31, 2020: The interest coverage ratio was -2.65, indicating that the company generated operating income insufficient to cover its interest expenses, which raises concerns about its ability to meet debt obligations solely through operating profits.
2. December 31, 2021: The interest coverage ratio improved to 4.38, suggesting that the company's operating income was sufficient to cover its interest expenses by a factor of 4.38. This signifies a positive trend in the company's ability to meet its interest obligations.
3. December 31, 2022: The interest coverage ratio decreased slightly to 3.51, indicating a slight decline in the company's ability to cover its interest expenses from operating profits compared to the previous year.
4. December 31, 2023: The interest coverage ratio fell sharply to -0.30, signaling a negative interest coverage where the company's operating income was insufficient to cover its interest expenses. This could indicate financial distress and a high risk of default on debt obligations.
5. December 31, 2024: The interest coverage ratio further declined to 0.12, reinforcing the concerns from the previous year regarding the company's ability to meet its interest payments. A ratio of 0.12 reflects a significant challenge in covering interest expenses with operating income.
In conclusion, fluctuations in Newell Brands Inc's interest coverage ratio over the years indicate varying levels of ability to meet interest obligations through operating income. While there were improvements in some years, the sharp declines and negative ratios raise concerns about the company's financial health and its capability to service its debt effectively. Further analysis of the company's financial performance and debt management strategies would be necessary to assess its long-term sustainability.
Peer comparison
Dec 31, 2024