Astec Industries Inc (ASTE)
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 | 24,600 | 51,700 | 43,200 | 31,100 | 49,100 |
| Interest expense | US$ in thousands | 10,700 | 8,900 | 2,500 | 1,100 | 700 |
| Interest coverage | 2.30 | 5.81 | 17.28 | 28.27 | 70.14 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $24,600K ÷ $10,700K
= 2.30
The interest coverage ratio measures the ability of Astec Industries Inc to meet its interest obligations from its operating profits. A higher ratio indicates a stronger ability to cover interest expenses.
In December 31, 2020, Astec Industries Inc had an interest coverage ratio of 70.14, signifying a robust ability to cover its interest expenses. However, there was a decline in the interest coverage ratio in the subsequent years. By December 31, 2024, the interest coverage ratio had decreased to 2.30, indicating a significant reduction in the company's ability to cover its interest payments from its operating profits.
This declining trend in the interest coverage ratio raises concerns about Astec Industries Inc's financial health and ability to service its debt obligations. It suggests that the company's profitability may have weakened over the years or that its interest expenses have increased relative to its operating profits.
Investors and creditors should closely monitor Astec Industries Inc's financial performance and debt management strategies to ensure the company can adequately manage its interest payments and maintain financial stability in the future.
Peer comparison
Dec 31, 2024