Balchem Corporation (BCPC)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 182,981 | 159,874 | 146,267 | 129,946 | 113,131 |
| Interest expense | US$ in thousands | 16,528 | 22,613 | 10,268 | 2,456 | 4,439 |
| Interest coverage | 11.07 | 7.07 | 14.24 | 52.91 | 25.49 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $182,981K ÷ $16,528K
= 11.07
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest payments.
Looking at the trend for Balchem Corporation's interest coverage ratio from 2020 to 2024, we can see fluctuations in the company's ability to cover its interest expenses.
In 2020, the interest coverage ratio was 25.49, indicating a healthy ability to cover interest payments. This ratio increased significantly to 52.91 by the end of 2021, reflecting a stronger financial position and improved ability to meet interest obligations.
However, there was a notable decline in the interest coverage ratio to 14.24 by the end of 2022, suggesting the company may have faced challenges in generating sufficient income to cover its interest expenses. This trend continued into 2023, with the interest coverage ratio further dropping to 7.07, indicating potentially heightened financial risk.
By the end of 2024, the interest coverage ratio improved to 11.07, showing some recovery but still indicating a relatively lower ability to cover interest payments compared to previous years.
Overall, the fluctuations in Balchem Corporation's interest coverage ratio suggest varying levels of financial health and risk management over the years, with the need for monitoring and potential strategic adjustments to improve the company's ability to meet its interest obligations.
Peer comparison
Dec 31, 2024