Atmos Energy Corporation (ATO)

Interest coverage

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	1,355,360	1,136,920	954,719	902,853	831,270
Interest expense	US$ in thousands	14,655	137,281	102,811	83,554	84,474
Interest coverage		92.48	8.28	9.29	10.81	9.84

September 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,355,360K ÷ $14,655K
= 92.48

Atmos Energy Corporation's interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.

In 2024, the interest coverage ratio improved significantly to 92.48, indicating a strong ability to meet interest payment obligations with operating income. This substantial increase suggests that the company's operating income has significantly increased relative to its interest expenses.

In 2023, the interest coverage ratio was relatively low at 8.28, signaling a lower ability to cover interest expenses with operating income compared to the previous year. However, the ratio improved in 2022 to 9.29 and further increased in 2021 to 10.81, indicating a better ability to cover interest expenses over these periods.

In 2020, the interest coverage ratio was 9.84, which was relatively stable compared to the previous two years. This suggests that the company maintained a consistent ability to cover interest expenses with its operating income in 2020.

Overall, the fluctuation in Atmos Energy Corporation's interest coverage ratio over the years may reflect changes in the company's operating performance and the level of its interest expenses. An increasing trend in the interest coverage ratio indicates a stronger ability to meet interest payment obligations, while a decreasing trend may raise concerns about the company's financial health and ability to service its debt.