PPG Industries Inc (PPG)
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 | 1,956,000 | 1,518,000 | 1,934,000 | 1,488,000 | 1,767,000 |
| Interest expense | US$ in thousands | 247,000 | 167,000 | 121,000 | 138,000 | 132,000 |
| Interest coverage | 7.92 | 9.09 | 15.98 | 10.78 | 13.39 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,956,000K ÷ $247,000K
= 7.92
Interest coverage measures a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments.
Looking at PPG Industries, Inc.'s interest coverage ratio over the past five years, we can see a generally positive trend. The interest coverage ratios have been consistently above 15x, indicating a strong ability to cover interest expenses with operating income.
The interest coverage ratio peaked at 21.67x in 2023, which suggests that the company's operating income was more than sufficient to cover its interest expenses. This improvement from the previous year's ratio of 15.44x indicates a stronger financial position in terms of meeting interest obligations.
Overall, PPG Industries, Inc. has demonstrated strong interest coverage over the past five years, which is a positive indicator of its financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2023