Balchem Corporation (BCPC)
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 | 159,193 | 145,186 | 127,502 | 111,147 | 102,553 |
| Interest expense | US$ in thousands | 402 | 460 | 411 | 419 | 282 |
| Interest coverage | 396.00 | 315.62 | 310.22 | 265.27 | 363.66 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $159,193K ÷ $402K
= 396.00
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Balchem Corp.'s interest coverage has shown a declining trend over the past five years, from 51.91 in 2021 to 7.04 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened significantly.
A high interest coverage ratio, such as the values seen in 2021 and 2022, suggests that Balchem Corp. had a strong ability to meet its interest obligations. However, the substantial decrease in the ratio in 2023 may raise concerns about the company's ability to manage its debt obligations.
It is important for investors and creditors to monitor Balchem Corp.'s interest coverage ratio closely to assess the company's financial health and ability to meet its debt obligations in the future. Further analysis of the company's financial statements and performance indicators would be necessary to fully understand the reasons behind the declining trend in the interest coverage ratio.
Peer comparison
Dec 31, 2023