The Andersons Inc (ANDE)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 138,556 | 171,121 | 133,893 | -1,911 | 28,475 |
| Interest expense | US$ in thousands | 332 | 413 | 679 | 1,289 | 1,023 |
| Interest coverage | 417.34 | 414.34 | 197.19 | -1.48 | 27.83 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $138,556K ÷ $332K
= 417.34
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Analyzing Andersons Inc.'s interest coverage ratio over the past five years, we observe significant fluctuations. In 2020, the interest coverage ratio was notably low at 0.12, suggesting an insufficient capability to cover interest payments. This could signal financial distress or challenges in meeting debt obligations.
However, in the subsequent years, there was a substantial improvement in the interest coverage ratio. By 2023, the ratio had increased to 7.44, indicating a much stronger ability to cover interest expenses. This upward trend suggests enhanced financial health and a better capacity to manage debt obligations.
It is crucial for investors and stakeholders to monitor Andersons Inc.'s interest coverage ratio closely to assess the company's financial stability and debt management practices effectively.
Peer comparison
Dec 31, 2023