Chemed Corp (CHE)
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 | 401,245 | 353,475 | 334,263 | 352,182 | 398,345 |
| Interest expense | US$ in thousands | 1,780 | 3,108 | 4,584 | 1,868 | 2,355 |
| Interest coverage | 225.42 | 113.73 | 72.92 | 188.53 | 169.15 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $401,245K ÷ $1,780K
= 225.42
Chemed Corp's interest coverage ratio has shown fluctuation over the past five years according to the provided data. The ratio stood at 169.15 on December 31, 2020, indicating the company's strong ability to cover its interest expense. This strong coverage improved further to 188.53 by December 31, 2021, suggesting a continued healthy financial position.
However, there was a significant decline in interest coverage to 72.92 on December 31, 2022. This sharp decrease might raise concerns about the company's ability to cover its interest obligations comfortably.
The ratio then showed improvement to 113.73 on December 31, 2023, reflecting a recovery in the company's ability to cover its interest expenses. Subsequently, Chemed Corp's interest coverage ratio increased substantially to 225.42 by December 31, 2024, indicating a robust financial position and a significant increase in the company's ability to handle its interest payments.
In conclusion, the trend in Chemed Corp's interest coverage ratio indicates both strengths and potential vulnerabilities in the company's financial health over the years analyzed. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's ability to meet its debt obligations.
Peer comparison
Dec 31, 2024