APA Corporation (APA)
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 | 3,599,000 | 3,786,000 | 4,076,000 | 5,054,000 | 5,620,000 | 5,268,000 | 4,764,000 | 3,771,000 | 2,888,000 | 2,275,000 | 1,659,000 | 796,000 | -4,102,000 | -7,180,000 | -7,204,000 | -6,887,000 | -2,174,000 | 515,000 | 1,031,000 | 1,642,000 |
| Interest expense (ttm) | US$ in thousands | 291,000 | 294,000 | 297,000 | 297,000 | 312,000 | 333,000 | 361,000 | 397,000 | 419,000 | 261,000 | 269,000 | 264,000 | 255,000 | 378,000 | 363,000 | 431,000 | 425,000 | 414,000 | 511,000 | 432,000 |
| Interest coverage | 12.37 | 12.88 | 13.72 | 17.02 | 18.01 | 15.82 | 13.20 | 9.50 | 6.89 | 8.72 | 6.17 | 3.02 | -16.09 | -18.99 | -19.85 | -15.98 | -5.12 | 1.24 | 2.02 | 3.80 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,599,000K ÷ $291,000K
= 12.37
Interest coverage is a crucial financial ratio that indicates APA Corporation's ability to meet its interest expenses with its operating income. A higher interest coverage ratio implies a lower risk of default on its debt obligations.
Based on the data provided, APA Corporation's interest coverage has been relatively strong and consistent over the past eight quarters. The interest coverage ratio ranged from 9.40 to 15.89 during this period. This indicates that the company's operating income has consistently been sufficient to cover its interest expenses.
The highest interest coverage ratio was observed in Q1 2023 at 14.96, followed by Q2 2023 at 12.11. These peak ratios suggest a robust ability to cover interest payments during those periods. However, the interest coverage ratio slightly declined in the most recent quarter, Q4 2023, to 11.32, though it remained at a healthy level.
Overall, the trend in APA Corporation's interest coverage shows a stable financial position with consistent ability to service its interest obligations. This indicates sound financial management and a lower risk of default on debt payments, providing a favorable outlook for the company's creditors and investors.
Peer comparison
Dec 31, 2023