Avista Corporation (AVA)

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	328,660	326,134	316,941	304,587	277,216	278,508	256,386	248,169	252,959	229,080	240,195	243,771	261,530	264,198	260,383	253,516	230,747	222,900	222,297	227,150
Interest expense (ttm)	US$ in thousands	145,000	143,590	142,397	141,722	139,935	135,513	129,693	122,696	114,974	109,760	106,300	103,858	102,165	101,833	101,217	100,757	100,978	100,646	100,819	100,719
Interest coverage		2.27	2.27	2.23	2.15	1.98	2.06	1.98	2.02	2.20	2.09	2.26	2.35	2.56	2.59	2.57	2.52	2.29	2.21	2.20	2.26

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $328,660K ÷ $145,000K
= 2.27

The interest coverage ratio measures a company's ability to pay interest on outstanding debt with its operating income. Looking at the trend for Avista Corporation over the years, we can observe that the interest coverage ratio has fluctuated within a relatively narrow range. The ratios have generally been above 2, indicating that Avista has been generating enough operating income to cover its interest expense comfortably.

Specifically, the interest coverage ratio ranged from a low of 1.98 to a high of 2.59 during the period under review. The ratio peaked at 2.59 in September 30, 2021, suggesting a strong ability to meet interest obligations. However, there was a slight decline in the ratio in the following periods, with the ratio dropping to 1.98 in December 31, 2023, before recovering slightly to 2.27 in December 31, 2024.

Overall, the interest coverage ratios for Avista Corporation appear to indicate a stable financial position in terms of meeting interest payments. However, it would be important to continue monitoring this ratio to ensure that the company maintains a healthy balance between its operating income and interest expenses.