Allegheny Technologies Incorporated (ATI)
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 | 605,600 | 425,700 | 390,700 | 360,400 | 359,500 | 589,400 | 585,600 | 473,500 | 451,100 | 180,300 | 161,700 | 152,400 | 89,000 | -1,024,200 | -1,131,000 | -1,421,900 | -1,381,700 | -179,300 | -82,000 | 336,000 |
| Interest expense (ttm) | US$ in thousands | 124,200 | 111,200 | 107,000 | 99,900 | 93,200 | 84,600 | 81,600 | 83,700 | 87,400 | 92,500 | 96,800 | 97,100 | 96,900 | 97,900 | 97,900 | 95,900 | 94,400 | 92,800 | 91,900 | 96,100 |
| Interest coverage | 4.88 | 3.83 | 3.65 | 3.61 | 3.86 | 6.97 | 7.18 | 5.66 | 5.16 | 1.95 | 1.67 | 1.57 | 0.92 | -10.46 | -11.55 | -14.83 | -14.64 | -1.93 | -0.89 | 3.50 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $605,600K ÷ $124,200K
= 4.88
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay interest on its debt obligations. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense.
Analyzing the interest coverage ratio of Allegheny Technologies Incorporated from March 31, 2020, to December 31, 2024, reveals fluctuations in the company's ability to cover its interest expenses:
- In March 2020, the interest coverage ratio was 3.50, indicating that Allegheny Technologies could cover its interest payments 3.5 times.
- However, the ratio turned negative in June 2020 and remained negative until the end of December 2021, suggesting that the company's EBIT was insufficient to cover its interest expenses during this period.
- The trend reversed in March 2022, and the interest coverage ratio started to improve gradually, reaching a positive value by December 2022.
- From that point, the ratio continued to increase steadily, indicating that Allegheny Technologies' EBIT was more than adequate to cover its interest obligations from 2022 onwards.
Overall, the fluctuating trend in the interest coverage ratio of Allegheny Technologies reveals a period of financial strain followed by a recovery in the company's ability to meet its interest payments. Investors and creditors may view this improvement positively as it indicates a strengthening financial position and reduced risk of default on debt obligations.