Yum! Brands Inc (YUM)
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 | 2,403,000 | 2,355,000 | 2,349,000 | 2,315,000 | 2,318,000 | 2,287,000 | 2,220,000 | 2,201,000 | 2,187,000 | 2,111,000 | 2,092,000 | 2,105,000 | 2,139,000 | 2,119,000 | 2,063,000 | 1,796,000 | 1,503,000 | 1,567,000 | 1,576,000 | 1,747,000 |
| Interest expense (ttm) | US$ in thousands | 489,000 | 490,000 | 496,000 | 500,000 | 513,000 | 518,000 | 516,000 | 539,000 | 527,000 | 941,000 | 805,000 | 661,000 | 555,000 | 136,000 | 309,000 | 437,000 | 543,000 | 931,000 | 771,000 | 639,000 |
| Interest coverage | 4.91 | 4.81 | 4.74 | 4.63 | 4.52 | 4.42 | 4.30 | 4.08 | 4.15 | 2.24 | 2.60 | 3.18 | 3.85 | 15.58 | 6.68 | 4.11 | 2.77 | 1.68 | 2.04 | 2.73 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,403,000K ÷ $489,000K
= 4.91
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.
Based on the data provided for Yum! Brands Inc, the interest coverage ratio fluctuated over the periods. In March 2020, the ratio was 2.73, indicating that the company generated enough earnings to cover its interest payments 2.73 times. The ratio decreased in subsequent quarters, hitting a low of 1.68 in September 2020, suggesting a potential strain on the company's ability to cover interest expenses.
However, the interest coverage improved significantly in the following quarters, reaching a peak of 15.58 in September 2021. This indicates a strong ability to cover interest payments. The ratio stabilized around the range of 4 in the later periods, showing consistent performance in meeting interest obligations.
Overall, Yum! Brands Inc's interest coverage ratio demonstrates fluctuations but generally reflects an adequate ability to cover interest expenses, with periods of strength and stability in the company's financial health.
Peer comparison
Dec 31, 2024