Organon & Co (OGN)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,200,000 | 1,197,000 | 1,373,000 | 1,372,000 | 1,544,000 | 1,648,000 | 1,745,000 | 1,855,000 | 1,787,000 |
| Interest expense (ttm) | US$ in thousands | 527,000 | 517,000 | 491,000 | 457,000 | 422,000 | 401,000 | 391,000 | 355,000 | 258,000 |
| Interest coverage | 2.28 | 2.32 | 2.80 | 3.00 | 3.66 | 4.11 | 4.46 | 5.23 | 6.93 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,200,000K ÷ $527,000K
= 2.28
The interest coverage ratio of Organon & Co. has fluctuated over the past eight quarters, ranging from a low of 2.50 in Q3 2023 to a high of 5.31 in Q1 2022. This ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
The declining trend in the interest coverage ratio from Q1 2022 to Q3 2023 suggests a potential decrease in the company's ability to cover its interest expenses using its operating income. However, the ratio saw a slight improvement in Q4 2023 compared to the previous quarter.
Organon & Co. should carefully monitor this metric to ensure that it remains at a healthy level, as a lower interest coverage ratio may indicate an increased risk of financial distress or an inability to meet debt obligations. Further analysis of the company's earnings and interest expense trends is recommended to assess the sustainability of its current financial position.
Peer comparison
Dec 31, 2023