Civitas Resources Inc (CIVI)
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 | 1,539,000 | 1,182,190 | 1,685,980 | 261,479 | 45,026 |
| Interest expense | US$ in thousands | 456,303 | 182,740 | 32,199 | 9,700 | 2,045 |
| Interest coverage | 3.37 | 6.47 | 52.36 | 26.96 | 22.02 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,539,000K ÷ $456,303K
= 3.37
Based on the data provided, Civitas Resources Inc's interest coverage has shown fluctuations over the years.
As of December 31, 2020, the interest coverage ratio was 22.02, indicating that the company generated 22 times the operating income needed to cover its interest expenses. This suggests a strong ability to meet its interest obligations.
By December 31, 2021, the interest coverage ratio improved to 26.96, signaling a further enhancement in the company's ability to meet its interest payments.
The year 2022 saw a significant increase in the interest coverage ratio to 52.36, reflecting a robust financial position with a substantial buffer to cover interest costs.
However, by December 31, 2023, the interest coverage ratio declined to 6.47, raising concerns about the company's ability to meet its interest obligations comfortably.
The trend continued to deteriorate by December 31, 2024, with the interest coverage ratio dropping further to 3.37, indicating a potential strain on the company's ability to cover its interest expenses with its operating income.
Overall, while Civitas Resources Inc has demonstrated strong interest coverage in some years, the declining trend in recent years suggests a need for further analysis and proactive measures to ensure the company's financial health and sustainability.
Peer comparison
Dec 31, 2024