O-I Glass Inc (OI)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 391,000 | 1,001,000 | 532,000 | 603,000 | 29,000 |
| Interest expense | US$ in thousands | 342,000 | 239,000 | 216,000 | 265,000 | 311,000 |
| Interest coverage | 1.14 | 4.19 | 2.46 | 2.28 | 0.09 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $391,000K ÷ $342,000K
= 1.14
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a greater ability to meet interest obligations. O-I Glass Inc's interest coverage has fluctuated over the past five years. In 2023, the interest coverage ratio was 1.14, down significantly from the previous year's ratio of 4.19. This suggests that the company may have had more difficulty covering its interest expenses in 2023. However, it is important to note that the ratio is still above 1, indicating that the company generated enough earnings to cover its interest payments. Looking at the trend over the five-year period, it appears that O-I Glass Inc has experienced some volatility in its ability to cover interest expenses, with the ratio ranging from a low of 0.09 in 2019 to a high of 4.19 in 2022. Further analysis of the company's financial performance and debt structure would provide more insight into the factors driving these fluctuations in interest coverage.