Chord Energy Corp (CHRD)

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	1,168,960	1,367,660	1,370,450	-2,998	-4,055,520
Interest expense	US$ in thousands	56,523	28,630	25,341	17,079	176,545
Interest coverage		20.68	47.77	54.08	-0.18	-22.97

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,168,960K ÷ $56,523K
= 20.68

Chord Energy Corp's interest coverage ratio, a measure of the company's ability to cover its interest payments with its earnings, experienced significant fluctuations over the years.

As of December 31, 2020, the interest coverage ratio was -22.97, indicating that the company's earnings were insufficient to cover its interest expenses, raising concerns about its financial health. However, there was a notable improvement by December 31, 2021, with the ratio at -0.18, still negative but showing signs of progress.

By December 31, 2022, Chord Energy Corp's interest coverage ratio improved significantly to 54.08, suggesting that the company was generating ample earnings to comfortably cover its interest obligations. This positive trend continued into December 31, 2023, with a ratio of 47.77, indicating continued financial strength.

Although there was a slight decrease by December 31, 2024, with the interest coverage ratio at 20.68, the company still maintained a healthy ability to meet its interest payments from its earnings.

Overall, the improving trend in Chord Energy Corp's interest coverage ratio from negative to positive figures indicates a strengthening financial position and the company's enhanced ability to fulfill its debt obligations over the years.