American States Water Company (AWR)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	209,282	129,087	147,604	137,153	133,598
Interest expense	US$ in thousands	42,762	27,027	22,834	22,531	24,586
Interest coverage		4.89	4.78	6.46	6.09	5.43

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $209,282K ÷ $42,762K
= 4.89

American States Water Co. has maintained a relatively stable interest coverage ratio over the past five years. The interest coverage ratio indicates the company's ability to cover its interest expenses with its operating income. With a range of 5.12 to 6.58 during the period under review, the company demonstrates a consistent ability to meet its interest obligations comfortably. The average interest coverage ratio of approximately 6.10 suggests that the company's operating income is sufficient to cover its interest payments over this period. This indicates a solid financial position and suggests that American States Water Co. has been managing its debt obligations effectively.