Pilgrims Pride Corp (PPC)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 566,751 | 254,517 | 404,037 | 824,593 | 1,177,537 | 1,342,807 | 1,102,754 | 463,967 | 237,914 | 200,472 | 165,883 | 315,062 | 287,630 | 392,360 | 494,164 | 750,042 | 749,563 | 613,966 | 521,300 | 427,421 |
| Interest expense (ttm) | US$ in thousands | 202,272 | 176,828 | 168,078 | 159,038 | 152,672 | 146,277 | 139,215 | 151,754 | 145,792 | 141,361 | 142,092 | 123,764 | 126,118 | 129,021 | 130,485 | 131,756 | 132,630 | 136,095 | 139,401 | 146,074 |
| Interest coverage | 2.80 | 1.44 | 2.40 | 5.18 | 7.71 | 9.18 | 7.92 | 3.06 | 1.63 | 1.42 | 1.17 | 2.55 | 2.28 | 3.04 | 3.79 | 5.69 | 5.65 | 4.51 | 3.74 | 2.93 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $566,751K ÷ $202,272K
= 2.80
Interest coverage is a crucial financial ratio that indicates a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio signifies that the company is more capable of servicing its debt.
Analyzing the interest coverage ratio of Pilgrim`s Pride Corp. over the past eight quarters, we observe fluctuations in the company's ability to cover its interest expenses. In Q4 2023, the interest coverage ratio stands at 3.40, indicating that the company's operating income is able to cover its interest expenses 3.40 times over. This represents a decrease from the previous quarter, where the ratio was 2.21.
The trend in the interest coverage ratio shows variability over the quarters, with Q4 2022 showing the highest interest coverage ratio of 8.40, and Q1 2023 showing the lowest interest coverage ratio of 3.14. This fluctuation may suggest changes in the company's profitability and its ability to generate sufficient income to meet its interest payments.
Overall, while the company's interest coverage ratios have varied, it is essential for investors and stakeholders to closely monitor Pilgrim`s Pride Corp.'s ability to maintain a healthy interest coverage ratio to ensure its ongoing financial stability and ability to service its debt obligations.
Peer comparison
Dec 31, 2023