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CP (Canadian Pacific Kansas City) Interest Coverage : 6.27 (As of Sep. 2024)


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What is Canadian Pacific Kansas City Interest Coverage?

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 by its Interest Expense. Canadian Pacific Kansas City's Operating Income for the three months ended in Sep. 2024 was $888 Mil. Canadian Pacific Kansas City's Interest Expense for the three months ended in Sep. 2024 was $-142 Mil. Canadian Pacific Kansas City's interest coverage for the quarter that ended in Sep. 2024 was 6.27. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Canadian Pacific Kansas City's Interest Coverage or its related term are showing as below:

CP' s Interest Coverage Range Over the Past 10 Years
Min: 4.88   Med: 6.29   Max: 8.07
Current: 6.29


CP's Interest Coverage is ranked better than
52.38% of 819 companies
in the Transportation industry
Industry Median: 5.76 vs CP: 6.29

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


Canadian Pacific Kansas City Interest Coverage Historical Data

The historical data trend for Canadian Pacific Kansas City'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.

* Premium members only.

Canadian Pacific Kansas City Interest Coverage Chart

Canadian Pacific Kansas City Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Interest Coverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 6.83 7.23 7.29 5.07 5.69

Canadian Pacific Kansas City Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Interest Coverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.67 6.99 5.58 6.34 6.27

Competitive Comparison of Canadian Pacific Kansas City's Interest Coverage

For the Railroads subindustry, Canadian Pacific Kansas City'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.


Canadian Pacific Kansas City's Interest Coverage Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, Canadian Pacific Kansas City's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Canadian Pacific Kansas City's Interest Coverage falls into.



Canadian Pacific Kansas City 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 Operating Income is positive, then

Interest Coverage=-1* Operating Income /Interest Expense

Else if Interest Expense is negative and Operating Income 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.

Canadian Pacific Kansas City'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, Canadian Pacific Kansas City's Interest Expense was $-575 Mil. Its Operating Income was $3,268 Mil. And its Long-Term Debt & Capital Lease Obligation was $14,604 Mil.

Interest Coverage=-1* Operating Income (A: Dec. 2023 )/Interest Expense (A: Dec. 2023 )
=-1*3268.485/-574.687
=5.69

Canadian Pacific Kansas City's Interest Coverage for the quarter that ended in Sep. 2024 is calculated as

Here, for the three months ended in Sep. 2024, Canadian Pacific Kansas City's Interest Expense was $-142 Mil. Its Operating Income was $888 Mil. And its Long-Term Debt & Capital Lease Obligation was $13,812 Mil.

Interest Coverage=-1* Operating Income (Q: Sep. 2024 )/Interest Expense (Q: Sep. 2024 )
=-1*888.085/-141.739
=6.27

* 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.

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


Canadian Pacific Kansas City  (NYSE:CP) 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 .


Canadian Pacific Kansas City Interest Coverage Related Terms

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


Canadian Pacific Kansas City Business Description

Address
7550 Ogden Dale Road SouthEast, Calgary, AB, CAN, T2C 4X9
Canadian Pacific Kansas City is a Class-1 railroad operating on track that spans across most of Canada and into parts of the Midwestern and Northeastern United States. Following the April 2023 Kansas City Southern merger, CP operates new single-line-haul services from Canada and the Upper Midwest down through Texas, the Gulf of Mexico, and into Mexico. It also hauls cross border and intra Mexico freight via operating concessions on roughly 3,300 miles of rail in Mexico. CP hauls shipments of grain, intermodal containers, energy products (like crude and frac sand), chemicals, plastics, coal, fertilizer and potash, automotive products, and a diverse mix of other merchandise.
Executives
John Kenneth Brooks officer: SVP & Chief Marketing Officer 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
Mike Foran officer: VP Network Transportation 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
Clements James Dominic Luther officer: VP Planning & Transportation 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
Mark Kenneth Wallace officer: VP Corp Affrs & Chief of Staff 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
E Hunter Harrison director, officer: Chief Executive Officer 2708 SHELTINGHAM, WELLINGTON FL 33414
Trafton Gordon T. Ii director 2632 SUTTON CIRCLE, NAPERVILLE IL 60564
Ubavka Rebecca Macdonald director 130 KING STREET WEST, TORONTO A6 M5X 1E1
Jane L Peverett director 1489 MARINE DRIVE, SUITE 802, WEST VANCOUVER A1 V7T 1B8
Peter John Edwards officer: VP HR & Labour Relations 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
Robert Allen Johnson officer: Executive VP Operations 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
John E Derry officer: Vice-President Human Resources 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
William R. Fatt director 129 ROCHESTER AVENUE, TORONTO A6 M4N 1N9
Gillian H Denham director C/O CANADIAN PACIFIC RAILWAY LIMITED, 7550 OGDEN DALE ROAD S.E., CALGARY A0 T2C 4X9
Nadeem Velani officer: Interim VP and CFO 7550 OGDEN DALE ROAD S. E., CALGARY A0 T2C 4X9
Pershing Square Capital Management, L.p. director 787 11TH AVENUE, 9TH FLOOR, NEW YORK NY 10019