Allete Inc (ALE)

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	187,900	228,700	309,100	351,900	355,800	336,700	255,900	231,600	233,300	245,100	240,200	233,600	211,400	180,200	191,700	177,900	187,600	210,600	204,000	222,200
Interest expense (ttm)	US$ in thousands	81,700	80,700	80,900	81,900	80,800	80,800	78,700	76,200	75,200	72,600	71,500	70,300	69,100	69,500	68,500	67,000	65,600	63,900	63,700	64,100
Interest coverage		2.30	2.83	3.82	4.30	4.40	4.17	3.25	3.04	3.10	3.38	3.36	3.32	3.06	2.59	2.80	2.66	2.86	3.30	3.20	3.47

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $187,900K ÷ $81,700K
= 2.30

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a better ability to meet interest obligations.

For Allete Inc, the interest coverage ratio fluctuated over the analyzed periods, ranging from 2.30 to 4.40. The trend shows some variability but generally stayed within a moderate range. In March 2024, the interest coverage ratio was at its lowest at 2.30, indicating a potential strain on the company's ability to cover interest expenses.

However, the ratio improved in subsequent quarters, reaching a peak of 4.40 in December 2023, suggesting a stronger ability to meet interest payments. This improvement could be attributed to various factors such as increased operating income or lower interest expenses during that period.

Overall, despite some fluctuations, Allete Inc maintained a generally satisfactory interest coverage ratio range over the analyzed period, indicating a reasonable ability to meet its interest obligations with operating income.