Aecom Technology Corporation (ACM)
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 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 324,284 | 313,677 | 417,343 | 706,997 | 621,048 | 637,584 | 623,884 | 610,563 | 656,682 | 629,600 | 524,600 | 483,000 | 435,500 | 381,500 | 447,900 | 454,500 | 452,500 | 396,100 | 441,400 | 476,700 |
| Interest expense (ttm) | US$ in thousands | -28,515 | -33,072 | 7,496 | -3,956 | -3,956 | -38,956 | 32,316 | 10,100 | 11,300 | 12,200 | 12,900 | 9,400 | 8,200 | 7,400 | 8,700 | 9,400 | 10,000 | 10,600 | 10,200 | 10,300 |
| Interest coverage | — | — | 55.68 | — | — | — | 19.31 | 60.45 | 58.11 | 51.61 | 40.67 | 51.38 | 53.11 | 51.55 | 51.48 | 48.35 | 45.25 | 37.37 | 43.27 | 46.28 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $324,284K ÷ $-28,515K
= —
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt based on its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
In the case of AECOM, the interest coverage ratio has fluctuated over the past eight quarters. In Q1 2023, the ratio was at its highest at 6.35, which suggests that the company had sufficient operating income to cover its interest expenses more than six times over. This indicates a healthy financial position.
However, in Q3 2023, the interest coverage ratio dropped to 3.49, the lowest point in the period analyzed. This may raise concerns about AECOM's ability to cover its interest payments comfortably with its operating income during that specific quarter.
Overall, the trend shows some variability in the interest coverage ratio for AECOM, with fluctuations between 3.18 and 7.16 over the past eight quarters. Investors and creditors should monitor these fluctuations closely to assess the company's ongoing ability to meet its financial obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023