Civitas Resources Inc (CIVI)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,182,194	1,096,216	1,399,987	1,836,985	1,686,052	1,537,436	1,047,120	385,241	261,431	22,031	-29,019	-35,042	44,377	85,918	111,836	196,081	157,224	162,126	171,937	166,207
Interest expense (ttm)	US$ in thousands	182,740	100,218	31,219	30,582	32,199	27,665	23,222	18,347	9,700	6,255	3,531	691	1,396	4,105	4,804	4,788	4,815	3,369	2,977	3,397
Interest coverage		6.47	10.94	44.84	60.07	52.36	55.57	45.09	21.00	26.95	3.52	-8.22	-50.71	31.79	20.93	23.28	40.95	32.65	48.12	57.76	48.93

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,182,194K ÷ $182,740K
= 6.47

The interest coverage ratio of Civitas Resources Inc has shown some fluctuations over the past eight quarters. It was relatively lower in the Q4 2023 at 6.70, indicating that the company's ability to cover its interest expenses with its operating income decreased compared to the previous quarter. However, looking at the trend over the past eight quarters, the interest coverage ratio has generally been strong, with significantly higher ratios in previous periods such as Q3 2022, Q4 2022, and Q1 2023.

The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income. A higher ratio indicates a better ability to cover interest expenses. The fluctuations in Civitas Resources Inc's interest coverage ratio may be attributed to changes in operating income, interest expenses, or a combination of both factors.

It is essential for investors and stakeholders to monitor the company's interest coverage ratio consistently to assess its financial health and ability to service its debt obligations. Overall, Civitas Resources Inc has demonstrated a generally strong ability to cover its interest expenses with operating income, with some fluctuations in recent quarters.