Archrock Inc (AROC)
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 | 253,735 | 221,693 | 195,856 | 183,162 | 161,848 | 153,194 | 147,117 | 132,568 | 147,096 | 147,688 | 158,312 | 109,647 | 19,734 | 23,568 | 23,463 | 74,725 | 162,866 | 169,621 | 156,983 | 142,122 |
| Interest expense (ttm) | US$ in thousands | 111,488 | 109,930 | 106,768 | 102,594 | 101,259 | 100,303 | 100,634 | 102,136 | 108,135 | 107,763 | 107,476 | 107,296 | 105,716 | 108,373 | 110,553 | 110,729 | 104,681 | 100,898 | 97,015 | 94,398 |
| Interest coverage | 2.28 | 2.02 | 1.83 | 1.79 | 1.60 | 1.53 | 1.46 | 1.30 | 1.36 | 1.37 | 1.47 | 1.02 | 0.19 | 0.22 | 0.21 | 0.67 | 1.56 | 1.68 | 1.62 | 1.51 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $253,735K ÷ $111,488K
= 2.28
Archrock Inc's interest coverage ratio has shown a generally improving trend over recent quarters. The interest coverage ratio represents the company's ability to meet its interest obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
Looking at the data provided, we can see that the interest coverage ratio has increased from 1.29 in Q1 2022 to 2.32 in Q4 2023. This upward trend indicates that Archrock Inc's operating income has been sufficiently increasing to cover its interest expenses more effectively.
Despite some fluctuations quarter to quarter, the overall trend shows a positive improvement in Archrock Inc's ability to meet its interest obligations. It is essential to continue monitoring this ratio to ensure the company's financial health and ability to fulfill debt repayment obligations.
Peer comparison
Dec 31, 2023