ArcBest Corp (ARCB)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 244,434 | 172,619 | 399,269 | 280,986 | 98,278 |
| Interest expense | US$ in thousands | 8,980 | 8,911 | 7,701 | 8,904 | 11,697 |
| Interest coverage | 27.22 | 19.37 | 51.85 | 31.56 | 8.40 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $244,434K ÷ $8,980K
= 27.22
ArcBest Corp's interest coverage has shown fluctuations over the years based on the provided data. As of December 31, 2020, the interest coverage ratio was 8.40 times, indicating that the company generated 8.40 times the earnings necessary to cover its interest obligations.
The interest coverage significantly improved to 31.56 times by December 31, 2021, demonstrating a strong ability to meet interest payments comfortably. This positive trend continued in the subsequent years, with ratios of 51.85, 19.37, and 27.22 for December 31, 2022, 2023, and 2024, respectively.
The significant increase in interest coverage in 2021 suggests that the company's operating profits have increased substantially or that its interest expenses have decreased. However, the subsequent slight decline in 2023 indicates a potential change in either operating profits or interest expenses, which is crucial for further analysis.
Overall, the interest coverage ratios reflect ArcBest Corp's ability to meet its interest obligations and indicate its financial health and ability to manage debt. Monitoring this ratio over time can provide insights into the company's financial stability and performance.
Peer comparison
Dec 31, 2024