ASGN Inc (ASGN)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 304,400 364,100 410,700 529,000 303,900
Interest expense US$ in thousands 64,300 66,400 45,900 37,500 39,700
Interest coverage 4.73 5.48 8.95 14.11 7.65

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $304,400K ÷ $64,300K
= 4.73

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations from its operating income. Looking at the data provided for ASGN Inc, we observe variations in the interest coverage ratio over the years:

1. December 31, 2020: The interest coverage ratio was 7.65. This suggests that ASGN Inc's operating income was 7.65 times its interest expenses during that period, indicating a relatively solid ability to cover interest payments.

2. December 31, 2021: The interest coverage ratio improved significantly to 14.11. This indicates a notable enhancement in the company's ability to cover its interest obligations, reflecting a stronger financial position compared to the prior year.

3. December 31, 2022: The interest coverage ratio decreased to 8.95 from the previous year. While still at a reasonable level, this decline suggests a slight weakening in the company's ability to cover interest expenses compared to the prior year.

4. December 31, 2023: The interest coverage ratio dropped further to 5.48. This decrease indicates a significant reduction in ASGN Inc's ability to cover interest payments, potentially raising concerns about the company's financial health and its capacity to meet debt obligations.

5. December 31, 2024: The interest coverage ratio fell to 4.73. This decline signals a continued deterioration in the company's ability to cover interest expenses, highlighting potential financial stress and increased risk related to debt servicing.

In summary, while ASGN Inc exhibited fluctuations in its interest coverage ratio over the years, it experienced both improvements and declines in its ability to meet interest obligations from operating income. It is crucial for stakeholders to closely monitor these changes to assess the company's financial stability and debt repayment capacity.