ArcBest Corp (ARCB)

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	172,619	399,269	280,986	98,278	63,770
Interest expense	US$ in thousands	8,911	7,701	8,904	11,697	11,467
Interest coverage		19.37	51.85	31.56	8.40	5.56

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $172,619K ÷ $8,911K
= 19.37

Interest coverage is a key financial ratio that indicates the ability of a company, in this case, ArcBest Corp, to meet its interest obligations from its operating income. A higher interest coverage ratio suggests a stronger ability to cover interest payments. Analyzing ArcBest Corp's interest coverage ratio over the past five years reveals a positive trend. In 2019, the interest coverage ratio was 5.56, indicating that the company's operating income was able to cover its interest expenses 5.56 times.

However, the interest coverage ratio improved significantly in the subsequent years, reaching 8.40 in 2020, 31.56 in 2021, and 18.98 in 2023. This upward trend is a positive signal of ArcBest Corp's improving financial health and ability to comfortably cover its interest expenses with its operating income. It is noteworthy that the data for 2022 is missing, making it difficult to draw direct comparisons with the other years.

Overall, based on the available data, ArcBest Corp's interest coverage ratio has been on an upward trajectory, which indicates the company's improving ability to handle its interest obligations, a favorable indicator for investors and creditors assessing the company's financial stability and risk.