Arch Resources Inc (ARCH)
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 | 566,373 | 648,111 | 740,060 | 1,059,447 | 1,099,449 | 1,116,043 | 1,024,714 | 644,330 | 363,420 | 51,695 | -230,616 | -308,024 | -330,190 | -261,578 | 37,686 | 149,587 | 250,532 | 343,304 | 315,295 | 292,979 |
| Interest expense (ttm) | US$ in thousands | 14,821 | 14,999 | 15,939 | 17,540 | 20,461 | 26,997 | 29,088 | 26,891 | 23,972 | 17,752 | 14,590 | 15,172 | 14,432 | 13,529 | 14,589 | 15,441 | 16,485 | 17,703 | 18,833 | 19,508 |
| Interest coverage | 38.21 | 43.21 | 46.43 | 60.40 | 53.73 | 41.34 | 35.23 | 23.96 | 15.16 | 2.91 | -15.81 | -20.30 | -22.88 | -19.33 | 2.58 | 9.69 | 15.20 | 19.39 | 16.74 | 15.02 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $566,373K ÷ $14,821K
= 38.21
The interest coverage ratio of Arch Resources Inc has shown some variability over the periods examined. Generally, a higher interest coverage ratio indicates a company's ability to meet its interest obligations on outstanding debt.
From Dec 2023 to Mar 2023, the interest coverage ratio for Arch Resources Inc improved significantly from 38.21 to 60.40, reflecting a stronger ability to cover its interest expenses with operating income. The company's interest coverage then decreased slightly in Jun 2023 to 46.43 but remained at a relatively high level compared to historical data.
In the prior periods, interest coverage fluctuated notably, with some periods showing ratios below 10, indicating potential difficulties in meeting interest payments. Notably, in Jun 2021 and Mar 2021, the interest coverage ratios were negative (-15.81 and -20.30, respectively), suggesting that the company's operating income was insufficient to cover its interest expenses during those periods.
The trend in the most recent periods indicates an improvement in Arch Resources Inc's ability to cover its interest obligations, which could be a positive sign for the company's financial health and stability. However, it is important to closely monitor future interest coverage ratios to assess the company's ongoing ability to meet its debt obligations.
Peer comparison
Dec 31, 2023