Treehouse Foods Inc (THS)
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 | 96,500 | 158,200 | 71,000 | -14,100 | 121,900 |
| Interest expense | US$ in thousands | 63,400 | 74,800 | 69,900 | 72,100 | 104,800 |
| Interest coverage | 1.52 | 2.11 | 1.02 | -0.20 | 1.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $96,500K ÷ $63,400K
= 1.52
Treehouse Foods Inc's interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to meet interest payments.
Looking at the data provided, the interest coverage ratio for Treehouse Foods Inc fluctuated over the years:
- As of December 31, 2020, the interest coverage ratio was 1.16, indicating that the company barely had enough operating income to cover its interest expenses.
- By December 31, 2021, the interest coverage ratio decreased significantly to -0.20, which implies that the company's operating income was insufficient to cover its interest payments, raising concerns about its financial health.
- The ratio improved in the following years, reaching 1.02 by December 31, 2022, but remained at a level where the company's ability to cover interest expenses was still relatively tight.
- By December 31, 2023, the interest coverage ratio increased to 2.11, signaling an improvement in the company's ability to cover its interest costs.
- The ratio slightly decreased to 1.52 by December 31, 2024, but still remained above 1, indicating that the company's operating income was sufficient to cover its interest obligations.
Overall, the fluctuation in Treehouse Foods Inc's interest coverage ratio over the years highlights the importance of closely monitoring the company's financial performance and its ability to meet its debt obligations.
Peer comparison
Dec 31, 2024