Philip Morris International Inc (PM)
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 | 13,402,000 | 11,678,000 | 12,060,000 | 12,517,000 | 11,161,000 |
| Interest expense | US$ in thousands | 1,763,000 | 1,526,000 | 768,000 | 737,000 | 728,000 |
| Interest coverage | 7.60 | 7.65 | 15.70 | 16.98 | 15.33 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $13,402,000K ÷ $1,763,000K
= 7.60
To analyze Philip Morris International Inc's interest coverage over the years, we can look at the data provided.
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Based on the given data:
1. As of December 31, 2020, the interest coverage ratio was 15.33, which indicates that Philip Morris International Inc had a comfortable cushion to cover its interest expenses.
2. By December 31, 2021, the interest coverage ratio improved to 16.98, suggesting a further enhancement in the company's ability to meet its interest obligations.
3. Although the interest coverage ratio slightly decreased to 15.70 by December 31, 2022, it still remained at a satisfactory level.
4. The interest coverage ratio notably dropped to 7.65 as of December 31, 2023, signaling a potential decrease in Philip Morris International Inc's ability to cover its interest costs.
5. Furthermore, by December 31, 2024, the interest coverage ratio remained at a similar level of 7.60, indicating a continued challenge in meeting interest payments.
In summary, the trend in Philip Morris International Inc's interest coverage ratios shows generally strong coverage in the earlier years, with a significant decline in the later years. This declining trend could raise concerns about the company's ability to manage its interest expenses effectively in the future.
Peer comparison
Dec 31, 2024