ChampionX Corporation (CHX)
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 | 498,743 | 421,823 | 195,907 | 152,254 | -763,759 |
| Interest expense | US$ in thousands | 55,868 | 2,480 | 695 | 510 | 567 |
| Interest coverage | 8.93 | 170.09 | 281.88 | 298.54 | -1,347.02 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $498,743K ÷ $55,868K
= 8.93
The interest coverage ratio of ChampionX Corporation has shown significant fluctuations over the period from December 31, 2020, to December 31, 2024. Starting at a concerning level of -1,347.02 in 2020, indicating a negative coverage, the ratio improved drastically to 298.54 in 2021. However, it decreased slightly to 281.88 in 2022, followed by a further drop to 170.09 in 2023. The company's interest coverage ratio took a significant hit in 2024, dropping to a worrisome level of 8.93.
These fluctuations indicate that ChampionX Corporation's ability to cover its interest obligations with its operating income has been unstable during the period under review. More specifically, the company went from a severe lack of coverage in 2020 to relatively healthier levels in 2021 and 2022, before facing challenges again in 2023 and 2024. This suggests that the company's financial health may have been volatile, and stakeholders should monitor trends in the interest coverage ratio closely to assess the company's ability to meet its debt obligations.
Peer comparison
Dec 31, 2024