ODP Corp (ODP)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 146,000 | 97,000 | 97,000 | 155,000 | 229,000 | 284,000 | 267,000 | 262,000 | 243,000 | 230,000 | 271,000 | 266,000 | 282,000 | 265,000 | 281,000 | 246,000 | 266,000 | 328,000 | 329,000 | 392,000 |
| Interest expense (ttm) | US$ in thousands | 22,000 | 20,000 | 19,000 | 19,000 | 20,000 | 20,000 | 16,000 | 15,000 | 15,000 | 17,000 | 23,000 | 25,000 | 27,000 | 27,000 | 26,000 | 31,000 | 42,000 | 56,000 | 72,000 | 84,000 |
| Interest coverage | 6.64 | 4.85 | 5.11 | 8.16 | 11.45 | 14.20 | 16.69 | 17.47 | 16.20 | 13.53 | 11.78 | 10.64 | 10.44 | 9.81 | 10.81 | 7.94 | 6.33 | 5.86 | 4.57 | 4.67 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $146,000K ÷ $22,000K
= 6.64
The interest coverage ratio of ODP Corp has shown a relatively stable trend over the past few years. Starting at 4.67 on March 31, 2020, the ratio increased gradually to 16.20 by December 31, 2022. This significant improvement indicates the company's ability to cover its interest expenses with operating income.
However, there was a decline in the interest coverage ratio in the subsequent periods. The ratio dropped to 8.16 on March 31, 2024, and further decreased to 4.85 on September 30, 2024. These reductions suggest a potential strain on ODP Corp's ability to cover its interest payments from its operating earnings.
It is essential for ODP Corp to monitor and manage its interest coverage ratio effectively to ensure it remains at a healthy level, as a declining ratio could raise concerns among investors and creditors about the company's financial health and ability to meet debt obligations.
Peer comparison
Dec 31, 2024