Archrock Inc (AROC)
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 | 237,452 | 228,239 | 244,685 | 285,430 | 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 |
| Interest expense (ttm) | US$ in thousands | 5,072 | 31,513 | 58,600 | 112,241 | 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 |
| Interest coverage | 46.82 | 7.24 | 4.18 | 2.54 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $237,452K ÷ $5,072K
= 46.82
The interest coverage ratio for Archrock Inc indicates the company's ability to cover its interest expenses with its operating income. It is calculated by dividing Earnings Before Interest and Taxes (EBIT) by the interest expenses. A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations.
From March 31, 2020, to December 31, 2024, the interest coverage ratio for Archrock Inc ranged from as low as 0.19 to as high as 46.82. The ratio notably fluctuated over the period, with a significant increase observed from the end of 2023 to the end of 2024. This improvement in the interest coverage ratio suggests that the company's operating income has become more sufficient to cover its interest expenses.
Overall, a rising interest coverage ratio is a positive indicator of Archrock Inc's financial health, as it signifies a strengthening ability to meet its debt obligations through its operational earnings. It is essential for investors and stakeholders to monitor this ratio over time to assess the company's financial leverage and risk management.
Peer comparison
Dec 31, 2024