AdvanSix Inc (ASIX)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 73,322 | 229,051 | 187,714 | 60,661 | 59,777 |
| Interest expense | US$ in thousands | 4,099 | 3,260 | 2,598 | 5,628 | 6,429 |
| Interest coverage | 17.89 | 70.26 | 72.25 | 10.78 | 9.30 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $73,322K ÷ $4,099K
= 17.89
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating profits. AdvanSix Inc's interest coverage has shown significant fluctuations over the past five years. In 2023, the interest coverage ratio was 9.29, indicating that the company generated operating profits 9.29 times higher than its interest expenses. This decrease from the exceptionally high value of 81.53 in 2022 suggests a potential decline in operating profits relative to interest expenses. However, the ratio remains at a relatively healthy level, providing reassurance that the company can continue to meet its interest obligations comfortably. The trend in the interest coverage ratio should be further monitored to assess the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023