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You are calculating the interest coverage ratios for two major oil and gas companies, Exxon Mobil Corporation and Royal Dutch Shell plc, for the fiscal
You are calculating the interest coverage ratios for two major oil and gas companies, Exxon Mobil Corporation and Royal Dutch Shell plc, for the fiscal year 2023.
Requirements:
- Exxon Mobil reported earnings before interest and taxes (EBIT) of $20 billion and interest expense of $5 billion for the fiscal year 2023. Royal Dutch Shell reported EBIT of $25 billion and interest expense of $4 billion during the same period.
- Calculate the interest coverage ratio for both Exxon Mobil and Royal Dutch Shell.
- Compare the interest coverage ratios of Exxon Mobil and Royal Dutch Shell and discuss their ability to meet interest obligations.
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