Amentum Holdings Inc. (AMTM)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	54,000	184,000	361,000	364,000	344,000	328,000
Interest expense (ttm)	US$ in thousands	87,000	111,000	111,000	111,000	111,000	0
Interest coverage		0.62	1.66	3.25	3.28	3.10	—

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $54,000K ÷ $87,000K
= 0.62

The interest coverage ratio is a key financial metric that provides insight into a company's ability to meet its interest obligations using its operating income. Looking at the data provided for Amentum Holdings Inc., we observe some fluctuations in the interest coverage ratio over the specified time period.

As of December 31, 2023, the interest coverage ratio stood at 3.10, indicating that Amentum Holdings Inc. was generating sufficient operating income to cover its interest expenses comfortably.

In the following quarters, the interest coverage ratio slightly improved to 3.28 as of March 31, 2024, and then decreased to 3.25 by June 30, 2024. These figures suggest that the company continued to have a healthy interest coverage ratio during this period.

However, the situation changed significantly by September 30, 2024, where the interest coverage ratio dropped to 1.66, indicating a potential strain on the company's ability to cover its interest payments with its operating income. This decline in the ratio may raise concerns about Amentum Holdings Inc.'s financial health and ability to meet its debt obligations.

Furthermore, by December 31, 2024, the interest coverage ratio plummeted to 0.62, falling below the industry benchmark and signaling a significant decrease in the company's ability to service its debt with its operating earnings. This sharp decline could be a cause for further investigation into the company's financial performance and liquidity position.

In conclusion, the interest coverage ratio for Amentum Holdings Inc. fluctuated over the period analyzed, initially showing strength but eventually weakening significantly. It is important for investors and stakeholders to continue monitoring this ratio to assess the company's ability to meet its interest obligations in the future.