Acadia Healthcare Company Inc (ACHC)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 458,247 | 56,765 | 443,903 | 352,753 | 341,902 |
| Interest expense | US$ in thousands | 116,368 | 82,125 | 69,760 | 76,993 | 158,105 |
| Interest coverage | 3.94 | 0.69 | 6.36 | 4.58 | 2.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $458,247K ÷ $116,368K
= 3.94
The interest coverage ratio for Acadia Healthcare Company Inc has shown fluctuation over the past five years. In December 2020, the ratio was 2.16, indicating that the company generated just enough operating income to cover its interest expenses.
In the subsequent years, the interest coverage ratio improved significantly. By December 2021, the ratio had increased to 4.58, and further to 6.36 by December 2022. These improvements suggest that Acadia Healthcare's operating income was more than sufficient to cover its interest obligations during these periods.
However, a concerning trend emerged by December 2023, when the interest coverage ratio plummeted to 0.69, indicating that the company struggled to cover its interest expenses with its operating income. This may raise questions about the company's ability to service its debt obligations if this trend continues.
The ratio recovered somewhat by December 2024, reaching 3.94. While an improvement from the previous year, it is still lower than the levels seen in 2022 and 2021.
Overall, the company's interest coverage ratio has been volatile, with significant fluctuations. Investors and analysts may want to closely monitor Acadia Healthcare's ability to generate sufficient operating income to cover its interest expenses going forward, especially in light of the sharp decline observed in 2023.
Peer comparison
Dec 31, 2024