Owens Corning Inc (OC)
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 | 1,134,000 | 1,673,000 | 1,723,000 | 1,440,000 | -122,000 |
| Interest expense | US$ in thousands | 212,000 | 76,000 | 109,000 | 126,000 | 132,000 |
| Interest coverage | 5.35 | 22.01 | 15.81 | 11.43 | -0.92 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,134,000K ÷ $212,000K
= 5.35
Owens Corning Inc's interest coverage ratio shows a fluctuating trend over the five-year period from December 31, 2020, to December 31, 2024. The ratio was negative in 2020, indicating that the company's earnings were insufficient to cover its interest expense. However, there was a significant improvement in 2021, with the interest coverage ratio increasing to 11.43, suggesting the company's ability to meet its interest obligations had improved.
Subsequently, the interest coverage ratio continued to increase in 2022 and 2023, reaching 15.81 and 22.01, respectively. These higher ratios indicate that Owens Corning Inc had a stronger capacity to cover its interest payments with its operating income during these years.
However, there was a notable decline in the interest coverage ratio in 2024 to 5.35, which might indicate a potential decrease in the company's ability to meet its interest obligations using its earnings. This decline could warrant further investigation into the company's financial health and operational performance during that period.