Amentum Holdings Inc. (AMTM)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	315,000	—	57,000	89,132	335,000
Interest expense	US$ in thousands	438,000	—	397,000	153,000	—
Interest coverage		0.72	—	0.14	0.58	—

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $315,000K ÷ $438,000K
= 0.72

The interest coverage ratio is a measure of a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates that a company is more capable of meeting its interest obligations.

Based on the provided data for Amentum Holdings Inc., the interest coverage ratio has been fluctuating over the years. As of December 31, 2021, the interest coverage ratio was not provided. This may suggest a lack of available data or a unique reporting situation.

Moving on to December 31, 2022, the interest coverage ratio was 0.58, indicating that the company's operating income was only able to cover 58% of its interest expenses. This could raise concerns about the company's ability to meet its interest payments comfortably.

By December 31, 2023, the interest coverage ratio further declined to 0.14, signaling a significant deterioration in the company's ability to cover its interest expenses with operating income. A ratio of 0.14 suggests that the company's operating income was only able to cover 14% of its interest obligations.

Unfortunately, the data for September 30, 2024, was not provided. However, by December 31, 2024, the interest coverage ratio improved slightly to 0.72. While this is a positive sign compared to the previous year, the ratio still remains low, indicating that the company may continue to face challenges in meeting its interest payments comfortably.

Overall, the trend in Amentum Holdings Inc.'s interest coverage ratio shows a concerning pattern of decline and volatility. It is essential for stakeholders to monitor this ratio closely to assess the company's financial health and ability to manage its debt obligations effectively.