Phillips 66 (PSX)
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 | 7,933,000 | 6,749,000 | 9,414,000 | 12,984,000 | 11,311,000 | 10,211,000 | 4,405,000 | -309,000 | -2,390,000 | 15,929,000 | 14,626,000 | 13,725,000 | 8,966,000 | -6,450,000 | -3,376,000 | -1,424,000 | 3,883,000 | 31,988,000 | 32,692,000 | 32,428,000 |
| Interest expense (ttm) | US$ in thousands | 926,000 | 897,000 | 833,000 | 699,000 | 642,000 | 590,000 | 584,000 | 594,000 | 605,000 | 602,000 | 583,000 | 556,000 | 521,000 | 378,000 | 242,000 | 121,000 | 6,000 | 132,000 | 260,000 | 400,000 |
| Interest coverage | 8.57 | 7.52 | 11.30 | 18.58 | 17.62 | 17.31 | 7.54 | -0.52 | -3.95 | 26.46 | 25.09 | 24.69 | 17.21 | -17.06 | -13.95 | -11.77 | 647.17 | 242.33 | 125.74 | 81.07 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $7,933,000K ÷ $926,000K
= 8.57
Based on the provided data, Phillips 66's interest coverage ratio has shown fluctuations over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
In Q1 2023, Phillips 66 had an interest coverage ratio of 25.42, signaling the company's strong ability to cover its interest expenses from its operating income. This was a significant improvement from the previous quarter where the ratio stood at 19.10.
The company's interest coverage ratio remained relatively stable throughout Q2 and Q3 2023, with values of 12.68 and 11.48 respectively. These levels, although lower compared to Q1 2023, still indicate a healthy ability to cover interest costs.
Looking back at Q4 2022 and Q3 2022, Phillips 66 maintained robust interest coverage ratios of 24.72 and 25.24, respectively. These high ratios suggest that the company had a strong financial position during those periods.
However, there was a slight dip in interest coverage in Q1 2022 with a ratio of 9.10, which could indicate potential challenges in meeting interest payments from operating income during that quarter.
Overall, despite some fluctuations, Phillips 66 has generally demonstrated a solid ability to cover its interest expenses from its operating income over the past eight quarters.
Peer comparison
Dec 31, 2023