PPL Corporation (PPL)
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 | 1,590,000 | 1,687,000 | 1,585,000 | 1,544,000 | 1,470,000 | 1,364,000 | 1,454,000 | 2,023,000 | -59,000 | 144,000 | 310,000 | 20,000 | 2,417,000 | 2,018,000 | 2,263,000 | 2,486,000 | 2,550,000 | 3,212,000 | 3,152,000 | 3,273,000 |
| Interest expense (ttm) | US$ in thousands | 666,000 | 646,000 | 617,000 | 570,000 | 513,000 | 469,000 | 516,000 | 872,000 | 918,000 | 965,000 | 943,000 | 633,000 | 634,000 | 354,000 | 452,000 | 534,000 | 621,000 | 991,000 | 976,000 | 965,000 |
| Interest coverage | 2.39 | 2.61 | 2.57 | 2.71 | 2.87 | 2.91 | 2.82 | 2.32 | -0.06 | 0.15 | 0.33 | 0.03 | 3.81 | 5.70 | 5.01 | 4.66 | 4.11 | 3.24 | 3.23 | 3.39 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,590,000K ÷ $666,000K
= 2.39
Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Looking at the historical trend of PPL Corp's interest coverage ratio, we observe a slight decline from Q1 2022 to Q2 2023, with ratios ranging from 1.70 to 2.95. The ratios have generally been above 2.0, indicating that PPL Corp has consistently generated sufficient earnings to cover its interest payments.
The recent ratios in Q2 and Q3 of 2023, ranging from 2.48 to 2.54, suggest that the company's earnings remain comfortably above its interest expenses. However, it is worth noting that the ratio has decreased compared to the higher levels seen in Q4 2022.
Overall, the interest coverage ratios demonstrate that PPL Corp has maintained a healthy ability to service its debt obligations with its earnings. It is advisable for the company to monitor this ratio in the future to ensure that it continues to generate enough income to cover its interest expenses effectively.
Peer comparison
Dec 31, 2023