Raytheon Technologies Corp (RTX)
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 | 7,817,000 | 7,576,000 | 4,233,000 | 5,267,000 | 5,086,000 | 4,732,000 | 7,716,000 | 7,636,000 | 7,113,000 | 6,349,000 | 6,123,000 | 6,046,000 | 5,972,000 | 5,220,000 | 4,232,000 | -1,022,000 | -1,578,000 | -368,000 | 722,000 | 6,518,000 |
| Interest expense (ttm) | US$ in thousands | 1,862,000 | 1,864,000 | 1,737,000 | 1,595,000 | 1,505,000 | 1,335,000 | 1,277,000 | 1,273,000 | 1,276,000 | 1,234,000 | 1,281,000 | 1,294,000 | 1,322,000 | 1,395,000 | 1,387,000 | 1,380,000 | 1,366,000 | 1,434,000 | 1,486,000 | 1,503,000 |
| Interest coverage | 4.20 | 4.06 | 2.44 | 3.30 | 3.38 | 3.54 | 6.04 | 6.00 | 5.57 | 5.15 | 4.78 | 4.67 | 4.52 | 3.74 | 3.05 | -0.74 | -1.16 | -0.26 | 0.49 | 4.34 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $7,817,000K ÷ $1,862,000K
= 4.20
Raytheon Technologies Corp's interest coverage ratio fluctuated significantly over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to meet its interest obligations on its debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.
The interest coverage ratio was in a concerning range below 1 for several quarters from June 30, 2020, to March 31, 2021, indicating that the company was not generating enough operating income to cover its interest expenses. This could raise concerns regarding the company's financial health and ability to meet its debt obligations.
However, the interest coverage ratio started improving from June 30, 2021, onwards, reaching levels above 3, which is more favorable as it indicates the company's operating income was sufficient to cover its interest expenses at a comfortable level. The trend continued to strengthen with the ratio exceeding 5 from September 30, 2022, to December 31, 2024, reflecting a healthier financial position and improved ability to handle interest payments.
Overall, the trend in Raytheon Technologies Corp's interest coverage ratio shows an initial period of financial strain followed by a recovery and improvement in the company's ability to cover its interest expenses with its operating income.
Peer comparison
Dec 31, 2024
See also:
Raytheon Technologies Corp Interest Coverage (Quarterly Data)