Organon & Co (OGN)
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 | 1,327,000 | 1,200,000 | 1,478,000 | 1,619,000 | 2,847,000 |
| Interest expense | US$ in thousands | 520,000 | 527,000 | 422,000 | 258,000 | 6,000 |
| Interest coverage | 2.55 | 2.28 | 3.50 | 6.28 | 474.50 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,327,000K ÷ $520,000K
= 2.55
The interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a greater ability to cover interest expenses.
Looking at the data for Organon & Co, we observe a significant decline in the interest coverage ratio over the years. As of December 31, 2020, the interest coverage ratio was 474.50, indicating a strong ability to cover interest expenses. However, by December 31, 2024, the ratio had dropped to 2.55, suggesting a substantial decrease in the company's ability to cover its interest payments.
This downward trend in the interest coverage ratio could raise concerns about Organon & Co's financial health and its capacity to manage its debt levels. It may indicate a higher risk of default or financial distress if the trend continues. Further analysis and monitoring of the company's financial performance and debt management strategies would be necessary to assess the impact of the declining interest coverage ratio on its overall financial stability.
Peer comparison
Dec 31, 2024