Organon & Co (OGN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,200,000 | 1,544,000 | 1,787,000 |
| Interest expense | US$ in thousands | 527,000 | 422,000 | 258,000 |
| Interest coverage | 2.28 | 3.66 | 6.93 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,200,000K ÷ $527,000K
= 2.28
The interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. Organon & Co.'s interest coverage ratio has declined over the past three years, from 7.02 in 2021 to 2.52 in 2023. This downward trend indicates that the company may be experiencing challenges in generating enough operating income to cover its interest expenses. The significant drop in the ratio suggests a potential increase in financial risk for Organon & Co. It is important for the company to closely monitor and manage its financial obligations to ensure its long-term financial stability. Further investigation into the company's financial performance and debt levels may be warranted to address these concerns.
Peer comparison
Dec 31, 2023