Cogent Communications Group Inc (CCOI)
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 | -216,322 | 1,326,260 | 116,207 | 111,840 | 106,993 |
| Interest expense | US$ in thousands | 43,322 | 106,783 | 67,584 | 67,074 | 62,486 |
| Interest coverage | -4.99 | 12.42 | 1.72 | 1.67 | 1.71 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-216,322K ÷ $43,322K
= -4.99
The interest coverage ratio measures a company's ability to meet its interest obligations using its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
For Cogent Communications Group Inc, the interest coverage ratio has fluctuated over the years:
- As of December 31, 2020, the interest coverage ratio was 1.71, suggesting that the company was just able to cover its interest expenses with its operating income.
- By December 31, 2021, the ratio decreased slightly to 1.67, indicating a slight decline in the company's ability to cover interest payments.
- The ratio improved to 1.72 by December 31, 2022, showing a modest increase in the company's ability to meet its interest obligations.
- A significant improvement was seen by December 31, 2023, with a notably higher interest coverage ratio of 12.42. This substantial increase suggests a substantial enhancement in the company's capacity to handle its interest payments compared to earlier years.
- However, by December 31, 2024, the interest coverage ratio turned negative at -4.99, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health and ability to meet debt obligations.
Overall, based on the trend observed, Cogent Communications Group Inc has shown fluctuations in its interest coverage ratio, with improvements seen towards the end of the period followed by a stark decline. It would be advisable for the company to closely monitor and manage its interest expenses to maintain a healthy interest coverage ratio and ensure financial stability.
Peer comparison
Dec 31, 2024