Berkshire Hathaway (Berkshire Hathaway) Interest Coverage

: 37.79 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's EBIT by its Interest Expense. Berkshire Hathaway's EBIT for the three months ended in Dec. 2023 was $48,214 Mil. Berkshire Hathaway's Interest Expense for the three months ended in Dec. 2023 was $-1,276 Mil. Berkshire Hathaway's interest coverage for the quarter that ended in Dec. 2023 was 37.79. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Berkshire Hathaway's Interest Coverage or its related term are showing as below:

BRK.B' s Interest Coverage Range Over the Past 10 Years
Min: 2.04 Med: 10.94 Max: 27.81
Current: 25.02

BRK.B's Interest Coverage is ranked better than
61.3% of 323 companies
in the Insurance industry
Industry Median: 13.52 vs BRK.B: 25.02

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Berkshire Hathaway Interest Coverage Historical Data

The historical data trend for Berkshire Hathaway's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Berkshire Hathaway Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

26.93

14.64

27.81

25.02

Berkshire Hathaway Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																20.41	37.74	37.38	-	37.79

Competitive Comparison

For the Insurance - Diversified subindustry, Berkshire Hathaway's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Berkshire Hathaway Interest Coverage Distribution

For the Insurance industry and Financial Services sector, Berkshire Hathaway's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Berkshire Hathaway's Interest Coverage falls into.

Berkshire Hathaway Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and EBIT is positive, then

Interest Coverage

-1

EBIT

Interest Expense

Else if Interest Expense is negative and EBIT is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Berkshire Hathaway's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Berkshire Hathaway's Interest Expense was $-5,003 Mil. Its EBIT was $125,169 Mil. And its Long-Term Debt & Capital Lease Obligation was $122,936 Mil.

Interest Coverage	=	-1	*	EBIT (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	125169	/	-5003
	=	25.02

Berkshire Hathaway's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Berkshire Hathaway's Interest Expense was $-1,276 Mil. Its EBIT was $48,214 Mil. And its Long-Term Debt & Capital Lease Obligation was $122,936 Mil.

Interest Coverage	=	-1	*	EBIT (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	48214	/	-1276
	=	37.79

The higher the ratio, the stronger the company's Financial Strength is.

Berkshire Hathaway (NYSE:BRK.B) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Berkshire Hathaway Interest Coverage Related Terms

Thank you for viewing the detailed overview of Berkshire Hathaway's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Berkshire Hathaway (Berkshire Hathaway) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Berkshire Hathaway Inc (NYSE:BRK.B) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

BRK.A:USA BRK_B:Peru BRKB:Mexico 1BRK:Italy BRYNd:UK 0HN0:UK 0R37:UK BRHF:Germany BRYN:Germany BRYN:Germany BRYN:Germany BRYN:Germany BRK:Canada BERK34:Brazil BRKB:Austria BRKB:Argentina

Address

3555 Farnam Street, Omaha, NE, USA, 68131

Website

https://www.berkshirehathaway.com

Berkshire Hathaway is a holding company with a wide array of subsidiaries engaged in diverse activities. The firm's core business segment is insurance, run primarily through Geico, Berkshire Hathaway Reinsurance Group, and Berkshire Hathaway Primary Group. Berkshire has used the excess cash thrown off from these and its other operations over the years to acquire Burlington Northern Santa Fe (railroad), Berkshire Hathaway Energy (utilities and energy distributors), and the firms that make up its manufacturing, service, and retailing operations (which include five of Berkshire's largest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR). The conglomerate is unique in that it is run on a completely decentralized basis.

Executives

Ajit Jain	director, officer: Vice Chairman	100 FIRST STAMFORD PLACE, BHRG, STAMFORD CT 06902
Murphy Thomas S Jr	director	C/O CRESTVIEW ADVISORS, 667 MADISON AVENUE, 10TH FLOOR, NEW YORK NY 10021
Warren E Buffett	director, 10 percent owner, officer: Chairman and CEO	3555 FARNAM ST, STE 1440, OMAHA NE 68131
Charlotte Guyman	director	3324 78TH PL. N.E., MEDINA WA 98004
Susan A. Buffett	director	808 CONAGRA DRIVE, OMAHA NE 68102
Christopher C Davis	director	C/O GRAHAM HOLDINGS COMPANY, 1300 NORTH 17TH STREET, SUITE 1700, ARLINGTON VA 22209
Ronald L Olson	director	EDISON INTERNATIONAL, 2244 WALNUT GROVE AVENUE, ROSEMEAD CA 91770
Kenneth I Chenault	director	C/O GENERAL CATALYST, 20 UNIVERSITY ROAD, 4TH FLOOR, CAMBRIDGE MA 02138
Gregory Abel	director, officer: Vice Chairman	666 GRAND AVE., STE.500, DES MOINES IA 50309
Meryl B Witmer	director	655 THIRD AVENUE, 11TH FLOOR, NEW YORK NY 10017
Thomas S Murphy	director	C/O WALT DISNEY CO, 500 S BUENA VISTA STREET, BURBANK CA 91521-1010
Bill & Melinda Gates Foundation Trust	10 percent owner	2365 CARILLON POINT, KIRKLAND WA 98033
Stephen B Burke	director	41 CENTRAL PARK WEST - APT 11A, NEW YORK NY 10023
Susan L Decker	director	C/O YAHOO INC, 701 FIRST AVE, SUNNYVALE CA 94089
Gates William H Iii	director	2365 CARILLON POINT, KIRKLAND WA 98033