ChampionX Corporation (CHX)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 498,504 | 336,844 | 353,452 | 379,254 | 374,059 | 356,793 | 200,347 | 148,542 | 80,959 | 19,321 | 104,748 | 64,720 | 25,473 | 9,456 | -46,100 | -180,544 | -849,992 | -771,247 | -759,246 | -619,361 |
| Interest expense (ttm) | US$ in thousands | 55,868 | 57,301 | 56,908 | 56,031 | 54,562 | 52,376 | 50,086 | 46,307 | 45,204 | 44,619 | 46,014 | 49,313 | 51,921 | 56,379 | 59,465 | 56,663 | 51,731 | 38,972 | 23,097 | 11,948 |
| Interest coverage | 8.92 | 5.88 | 6.21 | 6.77 | 6.86 | 6.81 | 4.00 | 3.21 | 1.79 | 0.43 | 2.28 | 1.31 | 0.49 | 0.17 | -0.78 | -3.19 | -16.43 | -19.79 | -32.87 | -51.84 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $498,504K ÷ $55,868K
= 8.92
Interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest obligations.
Analyzing the interest coverage ratios of ChampionX Corporation over the period from March 31, 2020, to December 31, 2024, we observe a significant improvement in the company's ability to cover its interest payments.
Initially, from March 2020 to March 2021, the interest coverage ratios were negative, indicating that the company was not generating enough operating income to cover its interest expenses. However, starting from March 2022, the ratios turned positive, indicating an improvement in the company's financial position.
The interest coverage ratio increased steadily from March 2022 to December 2024, reaching a high of 8.92. This upward trend signifies a notable improvement in ChampionX Corporation's ability to service its interest payments.
Overall, the increasing trend in the interest coverage ratio reflects positively on the company's financial health and suggests a reduced risk of default on its debt obligations.
Peer comparison
Dec 31, 2024