Organon & Co (OGN)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,374,000 | 1,427,000 | 1,326,000 | 1,349,000 | 1,302,000 | 1,215,000 | 1,402,000 | 1,481,000 | 1,653,000 | 1,760,000 | 1,858,000 | 1,910,000 | 1,837,000 | 1,962,000 | 2,148,000 | 2,359,000 | 2,798,000 |
| Interest expense (ttm) | US$ in thousands | 520,000 | 517,000 | 525,000 | 526,000 | 527,000 | 517,000 | 491,000 | 457,000 | 422,000 | 401,000 | 391,000 | 355,000 | 262,000 | 172,000 | 92,000 | 30,000 | 26,000 |
| Interest coverage | 2.64 | 2.76 | 2.53 | 2.56 | 2.47 | 2.35 | 2.86 | 3.24 | 3.92 | 4.39 | 4.75 | 5.38 | 7.01 | 11.41 | 23.35 | 78.63 | 107.62 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,374,000K ÷ $520,000K
= 2.64
The interest coverage ratio of Organon & Co has shown a declining trend over the most recent periods, starting at a strong level of 107.62 as of December 31, 2020, and decreasing to 2.64 by December 31, 2024. This ratio indicates the company's ability to meet its interest payments from its operating income.
The sharp decrease in the interest coverage ratio over time raises concerns about the company's ability to cover its interest expenses with operating income. A decreasing trend often signals deteriorating financial health and increased financial risk. A low interest coverage ratio suggests that the company may have difficulty meeting its debt obligations in the future, which could lead to potential liquidity issues or even default.
It is essential for investors and creditors to closely monitor Organon & Co's interest coverage ratio to assess the company's financial stability and ability to service its debt in the long run. Further analysis of the company's financial statements and overall financial health would be advisable to understand the underlying reasons for the declining interest coverage ratio and its potential implications for the company's financial position.
Peer comparison
Dec 31, 2024