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.
Peer comparison
Dec 31, 2023