Arcosa Inc (ACA)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 224,000 | 387,700 | 387,200 | 390,400 | 347,200 | 155,400 | 143,600 | 118,400 | 107,000 | 104,400 | 109,600 | 125,900 | 148,800 | 166,000 | 166,900 | 161,400 | 153,600 | 153,100 | 116,200 |
| Interest expense (ttm) | US$ in thousands | 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 | 6,800 | 6,000 | 4,400 |
| Interest coverage | 7.97 | 13.65 | 12.78 | 12.63 | 11.20 | 5.03 | 4.85 | 4.15 | 4.57 | 5.74 | 8.30 | 13.39 | 14.04 | 16.44 | 17.76 | 19.68 | 22.59 | 25.52 | 26.41 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $224,000K ÷ $28,100K
= 7.97
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio suggests that the company is more capable of covering its interest expenses.
Looking at the data provided for Arcosa Inc, we can observe a generally positive trend in interest coverage over the past eight quarters. The interest coverage ratio has been consistently increasing from 4.30 in Q1 2022 to 7.81 in Q4 2023. This indicates that Arcosa Inc's operating income has been effectively covering its interest expenses over time.
The gradual improvement in the interest coverage ratio reflects positively on Arcosa Inc's financial health and its ability to manage debt obligations. It suggests that the company has been generating sufficient operating income to comfortably cover its interest payments, which can be essential for maintaining financial stability and sustaining business operations.
Overall, the increasing trend in Arcosa Inc's interest coverage ratio signals a strengthening financial position and an improved capacity to service its debt obligations, which can be reassuring for investors and creditors.
Peer comparison
Dec 31, 2023