Exxon Mobil Corp (XOM)
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 | 52,288,000 | 76,714,000 | 31,623,000 | -26,914,000 | 20,452,000 |
| Interest expense | US$ in thousands | 849,000 | 798,000 | 947,000 | 1,158,000 | 830,000 |
| Interest coverage | 61.59 | 96.13 | 33.39 | -23.24 | 24.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $52,288,000K ÷ $849,000K
= 61.59
Exxon Mobil Corp.'s interest coverage ratio has varied significantly over the past five years. In 2023, the interest coverage ratio was 64.01, indicating that the company generated 64 times the earnings needed to cover its interest expenses. This suggests a strong ability to meet its interest obligations using its operating income.
Comparing this to the previous years, Exxon Mobil's interest coverage was notably higher in 2022 at 99.04, showing a peak performance in managing its interest expenses. In 2021, the ratio decreased to 34.81 but still remained healthy, indicating the company's ability to comfortably cover its interest payments.
However, a concerning sign was observed in 2020 when the interest coverage ratio turned negative to -22.90. A negative interest coverage ratio implies that Exxon Mobil's operating income was insufficient to cover its interest expenses during that period, raising a red flag about its financial health and solvency.
The improvement in 2023 compared to 2020 could indicate a turnaround in the company's financial performance, but it's essential to monitor this trend closely to ensure sustainable operations.
Overall, Exxon Mobil Corp.'s interest coverage ratio has shown fluctuations over the years, highlighting the importance of careful financial management and monitoring to ensure the company's ability to meet its debt obligations and maintain financial stability.
Peer comparison
Dec 31, 2023