CH Robinson Worldwide Inc (CHRW)

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	669,141	514,607	1,266,780	1,082,110	673,268
Interest expense	US$ in thousands	89,937	105,421	100,017	59,817	44,937
Interest coverage		7.44	4.88	12.67	18.09	14.98

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $669,141K ÷ $89,937K
= 7.44

Interest coverage is a key financial ratio used to assess a company's ability to cover its interest expenses with its earnings. Looking at the data provided for CH Robinson Worldwide Inc, we can observe the trend in the interest coverage ratio over the years:

- December 31, 2020: The interest coverage ratio was 14.98, indicating that the company earned nearly 15 times its interest expenses, reflecting a strong ability to meet its interest obligations.
- December 31, 2021: The interest coverage ratio improved to 18.09, signaling a further strengthening of the company's ability to cover its interest costs.
- December 31, 2022: The interest coverage ratio decreased to 12.67, but still remained at a healthy level, indicating that the company's earnings were more than sufficient to cover its interest payments.
- December 31, 2023: The interest coverage ratio dropped to 4.88, which might raise concerns as the ratio falls below 5, suggesting a potential strain on the company's ability to cover its interest expenses.
- December 31, 2024: The interest coverage ratio improved to 7.44, but it still remains lower than the ratios in the earlier years, indicating that the company may still be experiencing some challenges in meeting its interest obligations.

In summary, while CH Robinson Worldwide Inc maintained strong interest coverage ratios in the earlier years, there was a significant decline in 2023, followed by an improvement in 2024. It will be important for stakeholders to monitor the company's interest coverage closely to ensure its ability to meet its financial obligations.