Chemours Co (CC)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -100,000 | -121,000 | 141,000 | 797,000 | 903,000 | 1,277,000 | 1,213,000 | 1,033,000 | 862,000 | 590,000 | 427,000 | 409,000 | 390,000 | -85,000 | -54,000 | 58,000 | 85,000 | 716,000 | 888,000 | 1,073,000 |
| Interest expense (ttm) | US$ in thousands | 208,000 | 185,000 | 171,000 | 163,000 | 162,000 | 165,000 | 169,000 | 176,000 | 184,000 | 191,000 | 199,000 | 205,000 | 210,000 | 212,000 | 212,000 | 211,000 | 208,000 | 203,000 | 197,000 | 193,000 |
| Interest coverage | -0.48 | -0.65 | 0.82 | 4.89 | 5.57 | 7.74 | 7.18 | 5.87 | 4.68 | 3.09 | 2.15 | 2.00 | 1.86 | -0.40 | -0.25 | 0.27 | 0.41 | 3.53 | 4.51 | 5.56 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-100,000K ÷ $208,000K
= -0.48
The interest coverage ratio for Chemours Co has exhibited significant fluctuations over the past few quarters. The ratio indicates the company's ability to cover its interest expenses with operating income. A ratio below 1 implies that the company is not generating sufficient earnings to cover its interest obligations.
From December 2019 to September 2020, the interest coverage ratio was generally above 3, indicating a comfortable ability to pay interest expenses. However, from December 2020 to March 2021, the ratio dropped below 2, signaling a decline in the company's ability to cover interest costs.
The ratio improved in the following quarters, reaching a peak of 7.74 in September 2022, indicating a strong capacity to meet interest payments. However, the ratio declined in the subsequent quarters, falling to negative levels in December 2023 and September 2023, suggesting that the company's operating income was insufficient to cover interest expenses during those periods.
Overall, the trend in Chemours Co's interest coverage ratio shows variability, with periods of adequate coverage followed by periods of weakness. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to service its debt obligations in the future.
Peer comparison
Dec 31, 2023