Alcoa Corp (AA)
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 | 467,000 | -126,000 | -538,000 | -729,000 | -584,000 | -747,000 | -1,248,000 | -241,000 | 702,000 | 871,000 | 2,097,000 | 1,650,000 | 1,199,000 | 1,307,000 | 832,000 | 266,000 | 173,000 | -134,000 | -208,000 | -280,000 |
| Interest expense (ttm) | US$ in thousands | 156,000 | 139,000 | 121,000 | 108,000 | 107,000 | 105,000 | 104,000 | 107,000 | 106,000 | 108,000 | 141,000 | 178,000 | 195,000 | 210,000 | 193,000 | 158,000 | 146,000 | 134,000 | 123,000 | 121,000 |
| Interest coverage | 2.99 | -0.91 | -4.45 | -6.75 | -5.46 | -7.11 | -12.00 | -2.25 | 6.62 | 8.06 | 14.87 | 9.27 | 6.15 | 6.22 | 4.31 | 1.68 | 1.18 | -1.00 | -1.69 | -2.31 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $467,000K ÷ $156,000K
= 2.99
The interest coverage ratio for Alcoa Corp has been fluctuating over the analyzed period. The company experienced negative interest coverage ratios in the first half of 2020, indicating that its operating income was insufficient to cover its interest expenses during that time.
However, from December 2020 onwards, the interest coverage ratio started to improve steadily, reaching a peak in June 2022. This improvement suggests that Alcoa Corp's operating income increased sufficiently to cover its interest obligations comfortably during this period.
Subsequently, the interest coverage ratio started to decline in the latter half of 2022 and into 2023, with negative ratios indicating that the company may have faced challenges in generating enough operating income to cover its interest payments.
It is important for investors and creditors to closely monitor Alcoa Corp's interest coverage ratio to assess the company's ability to meet its debt obligations and to evaluate its overall financial health.
Peer comparison
Dec 31, 2024