AAON Inc (AAON)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 227,494 | 126,761 | 69,253 | 101,836 | 67,011 |
| Interest expense | US$ in thousands | 82 | 43 | 43 | 43 | 7 |
| Interest coverage | 2,774.32 | 2,947.93 | 1,610.53 | 2,368.28 | 9,573.00 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $227,494K ÷ $82K
= 2,774.32
AAON Inc.'s interest coverage ratio has been relatively stable and robust over the past few years, exhibiting a high level of ability to cover its interest expenses using its operating income. The company's interest coverage ratio was 46.97 in 2023, slightly lower than the 48.25 reported in 2022. Despite the slight decrease, both ratios indicate a strong ability to meet interest payment obligations.
The significant spike in the interest coverage ratio from 2021 to 2022, with a ratio of 524.48 in 2021, suggests a significant improvement in the company's ability to cover interest expenses compared to the previous years. This substantial increase may be attributed to a notable increase in operating income relative to interest expenses during that period.
While there is missing data for 2020 and 2019, the trend observed from 2021 to 2023 reflects a consistent and favorable interest coverage position for AAON Inc. The company's solid interest coverage ratios indicate a healthy financial position and a reduced risk of default on its debt obligations. Overall, AAON Inc. has demonstrated strong financial health and operational efficiency in managing its interest expenses.
Peer comparison
Dec 31, 2023