Omnicom Group Inc (OMC)
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 | 2,134,800 | 2,071,900 | 2,132,900 | 1,548,900 | 2,087,800 |
| Interest expense | US$ in thousands | 218,500 | 208,600 | 236,400 | 221,800 | 244,300 |
| Interest coverage | 9.77 | 9.93 | 9.02 | 6.98 | 8.55 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,134,800K ÷ $218,500K
= 9.77
Omnicom Group, Inc.'s interest coverage has shown a positive trend over the past five years, indicating the company's ability to meet its interest obligations comfortably. The interest coverage ratio has improved consistently from 11.55 in 2019 to 19.88 in 2023.
With an interest coverage ratio of 19.88 in 2023, the company is generating almost 20 times more operating income than what is required to cover its interest expenses. This suggests a strong financial position and lower risk of default on its debt obligations.
The increasing trend in the interest coverage ratio signifies the company's improving profitability and financial stability over the years. It shows that Omnicom Group, Inc. has been successful in managing its interest obligations efficiently and likely has strong cash flows to support its debt repayments.
Overall, the upward trajectory of Omnicom Group, Inc.'s interest coverage ratio signals a positive financial performance and indicates that the company has a solid ability to service its debt and interest payments.
Peer comparison
Dec 31, 2023