O-I Glass Inc (OI)
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 | 355,000 | 391,000 | 1,001,000 | 532,000 | 603,000 |
| Interest expense | US$ in thousands | 335,000 | 342,000 | 239,000 | 216,000 | 265,000 |
| Interest coverage | 1.06 | 1.14 | 4.19 | 2.46 | 2.28 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $355,000K ÷ $335,000K
= 1.06
The interest coverage ratio of O-I Glass Inc has shown some variability over the past years.
As of December 31, 2020, the interest coverage ratio was 2.28, indicating that the company earned 2.28 times the amount needed to cover its interest expenses. This level suggests a moderate ability to meet its interest obligations.
By December 31, 2021, the interest coverage ratio improved to 2.46, showing a slight increase in the company's ability to cover its interest costs.
The ratio significantly increased to 4.19 by December 31, 2022, demonstrating a strong improvement in O-I Glass Inc's ability to meet its interest payments, possibly due to increased earnings or reduced interest expenses.
However, there was a substantial decline in the interest coverage ratio to 1.14 by December 31, 2023, which may raise concerns about the company's ability to comfortably cover its interest obligations with its earnings.
The ratio further decreased to 1.06 by December 31, 2024, indicating a continued decline in the company's ability to cover its interest expenses, potentially signaling financial challenges or increased debt burdens.
Overall, while there have been fluctuations in O-I Glass Inc's interest coverage ratio in recent years, it is important for the company to maintain a healthy level of coverage to ensure its financial stability and meet its debt obligations.