Raytheon Technologies Corp (RTX)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,817,000 | 5,156,000 | 7,173,000 | 5,972,000 | -1,578,000 |
| Interest expense | US$ in thousands | 1,862,000 | 1,505,000 | 1,276,000 | 1,322,000 | 1,366,000 |
| Interest coverage | 4.20 | 3.43 | 5.62 | 4.52 | -1.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $7,817,000K ÷ $1,862,000K
= 4.20
Based on the provided data, Raytheon Technologies Corp's interest coverage has shown varying trends over the past few years.
In December 31, 2020, the interest coverage ratio was negative at -1.16, indicating that the company's operating income was insufficient to cover its interest expenses. This could raise concerns about the company's ability to meet its debt obligations with its current level of profitability.
By December 31, 2021, the interest coverage improved significantly to 4.52, suggesting that the company's operating income had strengthened relative to its interest expenses. This improvement is a positive sign as it signifies a better ability to manage and service its debt.
In December 31, 2022, the interest coverage ratio further increased to 5.62, indicating continued improvement in the company's ability to cover its interest payments comfortably. A higher interest coverage ratio generally implies a lower risk of default on debt obligations.
However, by December 31, 2023, the interest coverage ratio declined to 3.43, signaling a slight weakening in the company's ability to cover its interest expenses compared to the previous year. This could be a point of concern for investors and creditors, as it suggests a potential strain on the company's financial health.
Lastly, as of December 31, 2024, the interest coverage ratio improved slightly to 4.20, indicating a modest recovery in the company's ability to cover interest expenses. It will be important to monitor future trends to ensure continuing strength in Raytheon Technologies Corp's financial position.
Overall, fluctuations in Raytheon Technologies Corp's interest coverage ratio highlight the importance of closely monitoring the company's operating performance and financial health to assess its ability to meet its debt obligations in the long run.
Peer comparison
Dec 31, 2024