CF Industries Holdings Inc (CF)
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 | 2,230,000 | 3,015,000 | 3,521,000 | 4,565,000 | 5,397,000 | 5,315,000 | 4,468,000 | 3,140,000 | 1,729,000 | 756,000 | 893,000 | 723,000 | 623,000 | 642,000 | 790,000 | 985,000 | 1,003,000 | 1,023,000 | 971,000 | 770,000 |
| Interest expense (ttm) | US$ in thousands | 150,000 | 90,000 | 97,000 | 143,000 | 344,000 | 413,000 | 413,000 | 377,000 | 184,000 | 178,000 | 180,000 | 183,000 | 179,000 | 196,000 | 211,000 | 221,000 | 237,000 | 243,000 | 239,000 | 241,000 |
| Interest coverage | 14.87 | 33.50 | 36.30 | 31.92 | 15.69 | 12.87 | 10.82 | 8.33 | 9.40 | 4.25 | 4.96 | 3.95 | 3.48 | 3.28 | 3.74 | 4.46 | 4.23 | 4.21 | 4.06 | 3.20 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,230,000K ÷ $150,000K
= 14.87
Interest coverage ratio measures a company's ability to meet its interest obligations from its operating profits. CF Industries Holdings Inc's interest coverage ratio has fluctuated over the past eight quarters. In Q1 2023, the company had an interest coverage ratio of 63.79, indicating that CF Industries generated almost 64 times the operating income compared to its interest expenses. This was a significant improvement compared to the previous quarter, Q4 2022, when the ratio was 20.90.
The interest coverage ratio peaked in Q2 2023 at an impressive level of 912.75, suggesting a substantial increase in CF Industries' ability to cover its interest payments. The company's ability to service its interest expenses improved significantly sequentially from Q1 to Q2 2023.
However, the ratio declined in the subsequent quarters, showing a decreasing trend. In Q3 2023, the interest coverage ratio was not available, and it remained the same in Q4 2023. This reduction in the ratio may indicate a decrease in CF Industries' ability to cover interest payments from operating income in these quarters.
Overall, while CF Industries Holdings Inc demonstrated a strong ability to cover its interest obligations, the fluctuations in the interest coverage ratio over the analyzed periods suggest the importance of monitoring the company's operating performance and interest expense management closely.
Peer comparison
Dec 31, 2023