ODP Corp (ODP)
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 | 169,000 | 220,000 | 258,000 | 259,000 | 4,000 |
| Interest expense | US$ in thousands | 23,000 | 20,000 | 16,000 | 28,000 | 42,000 |
| Interest coverage | 7.35 | 11.00 | 16.12 | 9.25 | 0.10 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $169,000K ÷ $23,000K
= 7.35
The interest coverage ratio for ODP Corp has shown a significant improvement over the years, reflecting the company's ability to meet its interest payment obligations.
As of December 31, 2020, the interest coverage ratio was extremely low at 0.10, indicating a potential risk as the company's earnings were only sufficient to cover 10% of its interest expenses.
However, by December 31, 2021, the interest coverage ratio surged to 9.25, showcasing a substantial improvement in the company's ability to cover its interest payments. This improvement continued in the following years, with the ratio reaching 16.12 by December 31, 2022, indicating a robust financial position.
Although there was a slight dip in the interest coverage ratio to 11.00 by December 31, 2023, it still remained at a healthy level, suggesting the company's earnings continued to comfortably cover its interest costs.
By December 31, 2024, the interest coverage ratio decreased further to 7.35, signaling a slight decline in the company's ability to cover its interest expenses compared to the previous year.
Overall, the trend in ODP Corp's interest coverage ratio demonstrates an improvement in the company's financial health and its capacity to honor its interest obligations, with some fluctuations in recent years that may warrant further attention and monitoring.
Peer comparison
Dec 31, 2024