Allete Inc (ALE)

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	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	243,900	251,100	254,900	252,200
Interest expense (ttm)	US$ in thousands	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	64,900	65,200	66,700	67,500
Interest coverage		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	3.76	3.85	3.82	3.74

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $355,800K ÷ $80,800K
= 4.40

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

Looking at Allete, Inc.'s interest coverage ratio over the past 8 quarters, we observe fluctuations. In Q4 2023, the interest coverage ratio was 2.51, slightly higher than the previous quarter but still within a stable range. The ratio has shown resilience over the past year, with values ranging from 1.95 to 2.61.

The consistency of Allete, Inc.'s interest coverage ratio above 2 indicates that the company has been able to comfortably cover its interest expenses using its operating income. This suggests a healthy financial position, as the company is generating sufficient earnings to meet its debt obligations.

Overall, the trend in Allete, Inc.'s interest coverage ratio demonstrates a relatively stable and adequate ability to service its interest payments, which is a positive signal for investors and creditors.