PPL Corporation (PPL)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,854,000 | 1,748,000 | 1,741,000 | 1,629,000 | 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 |
| Interest expense (ttm) | US$ in thousands | 738,000 | 721,000 | 698,000 | 681,000 | 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 |
| Interest coverage | 2.51 | 2.42 | 2.49 | 2.39 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,854,000K ÷ $738,000K
= 2.51
PPL Corporation's interest coverage ratio has shown fluctuations over the analyzed periods. The interest coverage ratio measures a company's ability to pay its interest expenses with its operating income. A higher ratio indicates more financial flexibility and a lower risk of default on debt obligations.
Initially, in the first half of 2020, PPL Corporation had a healthy interest coverage ratio, ranging between 4.66 and 5.70, suggesting a comfortable capacity to cover interest payments. However, there was a noticeable decline by the end of 2020 and into early 2021, with ratios dropping significantly to near-zero and negative values. This indicates a potential strain on the company's financial health and its ability to service its debt.
Subsequently, from the first quarter of 2022 onwards, there was an improvement in the interest coverage ratio, with values ranging between 2.32 and 2.91. Although the ratios remained below the levels seen in 2020, the gradual increase suggests a recovery in the company's ability to cover interest expenses with its operating income.
Overall, the trend in PPL Corporation's interest coverage ratio indicates periods of strong coverage followed by challenges in meeting interest obligations. It is important for stakeholders to closely monitor this ratio to gauge the company's financial stability and debt servicing capabilities.
Peer comparison
Dec 31, 2024