Pilgrims Pride Corp (PPC)
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 | 566,751 | 1,177,540 | 237,914 | 287,630 | 749,563 |
| Interest expense | US$ in thousands | 202,272 | 152,672 | 145,792 | 126,118 | 132,630 |
| Interest coverage | 2.80 | 7.71 | 1.63 | 2.28 | 5.65 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $566,751K ÷ $202,272K
= 2.80
The interest coverage ratio for Pilgrim's Pride Corp. has varied over the past five years. In 2023, the ratio was 3.40, which indicates the company's ability to cover its interest expenses with operating income. This may suggest that the company's operating income is sufficient to meet its interest obligations, but the ratio could be further improved.
In contrast, the interest coverage ratio was significantly higher in 2022 at 8.40, indicating a stronger ability to cover interest payments with operating income. This could be a positive sign of improved financial health and stability compared to the previous year.
The ratio was lower in 2021 at 1.55, suggesting a potential risk as the company's operating income may not be adequate to cover its interest expenses. However, the ratio increased in 2020 to 2.07, showing a slight improvement in the company's ability to meet interest obligations.
In 2019, the interest coverage ratio was 5.83, indicating a comfortable level of coverage for the company's interest expenses.
Overall, the trend in Pilgrim's Pride Corp.'s interest coverage ratio shows some fluctuations over the years, with potential areas for improvement in managing interest expenses relative to operating income.
Peer comparison
Dec 31, 2023