Chemours Co (CC)

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 -111,000 904,000 861,000 389,000 84,000
Interest expense US$ in thousands 208,000 163,000 185,000 210,000 208,000
Interest coverage -0.53 5.55 4.65 1.85 0.40

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $-111,000K ÷ $208,000K
= -0.53

The interest coverage ratio for Chemours Co has shown fluctuations over the past five years. In 2023, the company's interest coverage ratio was negative, indicating that Chemours Co did not generate sufficient operating income to cover its interest expenses for that year. This is a concerning sign as it suggests the company's ability to meet its interest obligations is strained.

In contrast, in 2022 and 2021, the interest coverage ratios were 5.55 and 4.65 respectively, indicating that the company earned substantially more operating income compared to its interest expenses during those years. This demonstrates a strong ability to meet interest payments and suggests a healthier financial position.

However, in 2020 and 2019, the interest coverage ratios were 1.85 and 0.40 respectively, reflecting a lower ability to cover interest expenses with operating income. These lower ratios raise concerns about the company's ability to service its debt obligations comfortably.

Overall, the negative interest coverage in 2023 and the fluctuating ratios over the five-year period indicate potential financial instability and the need for Chemours Co to closely monitor and manage its debt levels and operating performance to improve its interest coverage ratio.