Exxon Mobil Corp (XOM)
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 | 48,486,000 | 49,236,000 | 49,956,000 | 47,983,000 | 52,288,000 | 60,517,000 | 72,018,000 | 84,789,000 | 76,714,000 | 69,711,000 | 54,246,000 | 36,313,000 | 31,623,000 | -5,885,000 | -15,577,000 | -23,281,000 | -26,914,000 | 5,428,000 | 10,368,000 | 16,189,000 |
| Interest expense (ttm) | US$ in thousands | 996,000 | 971,000 | 933,000 | 911,000 | 849,000 | 784,000 | 824,000 | 769,000 | 798,000 | 812,000 | 817,000 | 877,000 | 947,000 | 1,039,000 | 1,104,000 | 1,167,000 | 1,158,000 | 1,046,000 | 999,000 | 898,000 |
| Interest coverage | 48.68 | 50.71 | 53.54 | 52.67 | 61.59 | 77.19 | 87.40 | 110.26 | 96.13 | 85.85 | 66.40 | 41.41 | 33.39 | -5.66 | -14.11 | -19.95 | -23.24 | 5.19 | 10.38 | 18.03 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $48,486,000K ÷ $996,000K
= 48.68
Interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher ratio indicates a greater ability to meet interest obligations. Looking at the data provided for Exxon Mobil Corp, we see that the interest coverage ratio fluctuated significantly over the period.
The interest coverage ratio started at a healthy level of 18.03 in March 31, 2020, indicating that the company had sufficient earnings to cover its interest payments. However, the ratio decreased in the following quarters, dropping to as low as -23.24 in December 31, 2020, and -19.95 in March 31, 2021. These negative ratios suggest that Exxon Mobil Corp's earnings were insufficient to cover its interest expenses during these periods, raising concerns about its financial health.
The company's interest coverage ratio improved significantly in the subsequent quarters, reaching a high of 110.26 in March 31, 2023, and remaining relatively stable above 50 in the following quarters. This indicates a strong ability to meet interest payments as earnings significantly exceeded interest expenses.
Overall, Exxon Mobil Corp's interest coverage ratio has shown volatility but has generally improved in recent quarters, suggesting better financial stability and a reduced risk of defaulting on interest payments. Investors and analysts should continue to monitor the ratio to ensure the company can sustain its ability to cover interest expenses in the long term.
Peer comparison
Dec 31, 2024