Schlumberger NV (SLB)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,713,000 | 4,710,000 | 2,866,000 | -10,767,000 | -9,839,000 |
| Interest expense | US$ in thousands | 503,000 | 490,000 | 539,000 | 563,000 | 609,000 |
| Interest coverage | 11.36 | 9.61 | 5.32 | -19.12 | -16.16 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,713,000K ÷ $503,000K
= 11.36
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.
Looking at Schlumberger Ltd.'s interest coverage ratio over the past five years, there is a clear upward trend. In 2019, the ratio stood at 5.37, indicating that the company's EBIT was 5.37 times its interest expense. Subsequently, the ratio improved to 3.30 in 2020, 5.54 in 2021, 11.04 in 2022, and 14.13 in 2023.
The consistent improvement in the interest coverage ratio reflects Schlumberger's enhanced ability to meet its interest obligations from its operating income. This trend suggests an increasing ability to service its debt, providing a positive signal to potential creditors and investors. However, it's important to monitor changes in the company's interest expense and EBIT to ensure this positive trend continues in the future.
Peer comparison
Dec 31, 2023