Arcosa Inc (ACA)
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 | 200,900 | 198,800 | 211,000 | 200,000 | 221,400 | 385,100 | 387,200 | 390,400 | 347,200 | 158,300 | 146,500 | 121,300 | 109,900 | 104,400 | 109,600 | 125,900 | 148,800 | 166,000 | 166,900 | 161,400 |
| Interest expense (ttm) | US$ in thousands | 70,900 | 42,700 | 33,600 | 29,300 | 28,100 | 28,400 | 30,300 | 30,900 | 31,000 | 30,900 | 29,600 | 28,500 | 23,400 | 18,200 | 13,200 | 9,400 | 10,600 | 10,100 | 9,400 | 8,200 |
| Interest coverage | 2.83 | 4.66 | 6.28 | 6.83 | 7.88 | 13.56 | 12.78 | 12.63 | 11.20 | 5.12 | 4.95 | 4.26 | 4.70 | 5.74 | 8.30 | 13.39 | 14.04 | 16.44 | 17.76 | 19.68 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $200,900K ÷ $70,900K
= 2.83
The interest coverage ratio of Arcosa Inc has shown a declining trend from March 31, 2020, where it was 19.68, to December 31, 2024, where it dropped to 2.83. This indicates that the company's ability to cover its interest expenses with operating income has weakened over the period.
The ratio peaked in March 31, 2020, and has since been on a downward trajectory, hitting its lowest point in December 31, 2024. A declining interest coverage ratio may raise concerns about the company's ability to meet its interest obligations and could signal financial distress.
A decreasing interest coverage ratio could be a red flag for investors and creditors, suggesting that the company may be taking on too much debt relative to its earnings. It may also indicate that the company's profitability is under pressure, making it more vulnerable to economic downturns or changes in interest rates.
Investors and stakeholders should closely monitor Arcosa Inc's interest coverage ratio and assess the company's overall financial health and stability, considering the impact of the declining trend on its ability to manage debt and meet financial commitments.
Peer comparison
Dec 31, 2024