ArcBest Corp (ARCB)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	244,434	270,526	180,624	173,895	172,619	163,318	233,563	327,485	399,269	431,252	403,477	341,738	280,986	224,303	176,524	122,650	98,278	56,797	48,223	62,998
Interest expense (ttm)	US$ in thousands	8,980	8,913	8,868	8,995	9,094	8,918	8,431	8,089	7,701	7,681	8,004	8,415	8,904	9,286	10,074	11,178	11,697	12,059	12,099	11,532
Interest coverage		27.22	30.35	20.37	19.33	18.98	18.31	27.70	40.49	51.85	56.15	50.41	40.61	31.56	24.15	17.52	10.97	8.40	4.71	3.99	5.46

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $244,434K ÷ $8,980K
= 27.22

Interest coverage is a financial ratio that indicates a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.

Analyzing the interest coverage of ArcBest Corp over the provided periods, we observe fluctuations in the ratio. The interest coverage ratio ranged from a low of 3.99 in June 30, 2020, to a high of 56.15 in September 30, 2022. A ratio below 1 indicates that a company is not generating enough earnings to cover its interest payments, which can be a sign of financial distress.

The interest coverage ratio improved significantly for ArcBest Corp from March 31, 2021, onwards, reaching a peak of 56.15 in September 30, 2022. This improvement suggests that the company's earnings were more than sufficient to cover its interest expenses during this period. However, the ratio declined in the subsequent quarters but remained above 1, indicating continued ability to cover interest payments.

Overall, a higher interest coverage ratio is generally viewed positively by investors and creditors as it signifies a company's strong financial health and ability to manage its debt obligations. Monitoring this ratio over time provides insights into ArcBest Corp's financial stability and debt management practices.