American Water Works (AWK)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,504,000 | 1,466,000 | 1,427,000 | 1,322,000 | 1,273,000 | 1,232,000 | 1,210,000 | 1,213,000 | 1,196,000 | 1,239,000 | 1,255,000 | 1,238,000 | 1,248,000 | 1,209,000 | 1,182,000 | 1,171,000 | 1,170,000 | 1,194,000 | 1,123,000 | 1,123,000 |
| Interest expense (ttm) | US$ in thousands | 460,000 | 458,000 | 452,000 | 448,000 | 433,000 | 420,000 | 410,000 | 405,000 | 403,000 | 399,000 | 397,000 | 397,000 | 395,000 | 394,000 | 392,000 | 385,000 | 382,000 | 375,000 | 367,000 | 359,000 |
| Interest coverage | 3.27 | 3.20 | 3.16 | 2.95 | 2.94 | 2.93 | 2.95 | 3.00 | 2.97 | 3.11 | 3.16 | 3.12 | 3.16 | 3.07 | 3.02 | 3.04 | 3.06 | 3.18 | 3.06 | 3.13 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,504,000K ÷ $460,000K
= 3.27
American Water Works Co. Inc.'s interest coverage ratio has shown a consistent performance over the past eight quarters, ranging from 3.13 to 3.89. This ratio indicates the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). The higher the interest coverage ratio, the better, as it suggests that the company is more capable of meeting its interest obligations.
Based on the data provided, American Water Works Co. Inc. has maintained a healthy interest coverage ratio throughout the periods analyzed. This consistency suggests that the company has been generating sufficient earnings to cover its interest expenses, indicating a lower risk of defaulting on its debt obligations. Furthermore, the slight increasing trend in the interest coverage ratio over time from 3.13 in Q1 2022 to 3.89 in Q4 2023 reflects a positive trend in the company's ability to service its debt.
Overall, the stable and relatively high interest coverage ratio of American Water Works Co. Inc. indicates a financially sound position with the ability to comfortably meet its interest payment obligations, which is a positive signal for investors and creditors.
Peer comparison
Dec 31, 2023