Interest Coverage Ratio of Croatian Companies (9M Update)

For today we decided to present you with the updated analysis of the interest coverage ratio of Croatian companies.

For this we used 9M 2020 trailing 12m figures. Interest coverage ratio is used as a measure which gives us an insight on the company’s ability to meet its interest payments. The ratio is calculated by dividing the company’s operating profit by the interest expenses. Therefore, a higher ratio indicates that the company is less burdened by debt and the other way around. A ratio lower than 1 indicates that the company’s operating profit is not sufficient to cover for the interest payments.

Interest Coverage Ratio of Selected Croatian Companies

As visible in the graph Ericsson NT operates with the highest interest coverage ratio of 51.4, which does not come as a surprise given that the company operates with low debt. Next come 3 Food companies, Podravka, Kraš and Atlantic Grupa with an interest coverage ratio of 23.9, 15.3 and 14.8, respectively. All 3 companies operate also with low debt, as net debt/EBITDA of all of these companies ranges from 0.83x to 1.33x.

On the flip side, of the observed companies, the only one company operates with an interest coverage ratio below 1 – Optima Telekom.

We also note that tourist companies were excluded from the analysis, as all 3 of them recorded a trailing 12m operating loss.

To read our analysis of indebtedness of Croatian companies, click here.

To read about how much cash per share do Croatian blue chips have, click here.

InterCapital
Published
Category : Flash News

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