Treehouse Foods Inc (THS)
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 | 151,800 | 129,200 | 27,300 | -41,000 | -69,500 | -94,500 | -1,500 | 40,900 | 55,900 | 78,100 | 105,300 | 118,300 | 45,300 | 85,900 | -151,000 | -342,000 | -304,100 | -337,600 | -119,000 | 39,300 |
| Interest expense (ttm) | US$ in thousands | 74,800 | 76,600 | 73,200 | 71,000 | 69,900 | 67,800 | 66,800 | 68,300 | 76,700 | 74,800 | 85,200 | 92,900 | 92,600 | 101,800 | 102,200 | 102,100 | 102,400 | 101,400 | 100,200 | 105,400 |
| Interest coverage | 2.03 | 1.69 | 0.37 | -0.58 | -0.99 | -1.39 | -0.02 | 0.60 | 0.73 | 1.04 | 1.24 | 1.27 | 0.49 | 0.84 | -1.48 | -3.35 | -2.97 | -3.33 | -1.19 | 0.37 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $151,800K ÷ $74,800K
= 2.03
Treehouse Foods Inc's interest coverage ratio has shown significant fluctuations over the past eight quarters. The interest coverage ratio measures a company's ability to pay its interest expenses with its operating income. A higher ratio indicates a better ability to fulfill interest obligations.
In Q3 2023, Treehouse Foods Inc had a high interest coverage ratio of 11.47, signaling that the company generated ample operating income to cover its interest expenses over that period. This was a substantial improvement from the previous quarter, Q2 2023, where the ratio stood at 6.59.
Prior to the recent improvement, the interest coverage ratio in Q1 2023 decreased to 3.16, suggesting a potential strain on the company's ability to meet interest obligations with its operating income. However, this ratio was still higher compared to Q4 2022 when the ratio was just 0.76, indicating a notable improvement.
The interest coverage ratio for Treehouse Foods Inc in the second half of 2022 (Q3 and Q2) and early 2023 (Q1) was relatively low, below 1 in some quarters. A ratio below 1 indicates that the company's operating income was not sufficient to cover its interest expenses, raising concerns about the company's financial stability and ability to meet debt obligations.
Overall, the fluctuations in Treehouse Foods Inc's interest coverage ratio suggest varying levels of financial risk and operational efficiency over the analyzed quarters. It is crucial for the company to maintain a healthy interest coverage ratio to demonstrate its ability to manage debt and interest payments effectively.
Peer comparison
Dec 31, 2023