Cleveland-Cliffs Inc (CLF)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 677,000 | 1,939,000 | 4,012,000 | -142,000 | 429,000 |
| Interest expense | US$ in thousands | 23,000 | 17,000 | 15,000 | 57,000 | 24,800 |
| Interest coverage | 29.43 | 114.06 | 267.47 | -2.49 | 17.30 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $677,000K ÷ $23,000K
= 29.43
The interest coverage ratio for Cleveland-Cliffs Inc has fluctuated over the past five years. In 2023, the interest coverage ratio stands at 2.82, indicating that the company's operating profit is sufficient to cover its interest expenses 2.82 times over. This represents a decrease from the previous year's ratio of 7.44.
Looking back, the interest coverage ratio was relatively strong in 2021 at 12.20 and in 2019 at 4.51, suggesting a healthier ability to meet interest obligations with operating earnings. However, in 2020, the interest coverage ratio was remarkably low at 0.03, indicating a significant strain on the company's ability to cover interest expenses with operating income during that period.
Overall, the trend in interest coverage ratios for Cleveland-Cliffs Inc indicates some variability in its ability to service its interest payments with operating profits. It is important for investors and stakeholders to monitor this ratio closely to assess the company's financial health and its ability to meet debt obligations.
Peer comparison
Dec 31, 2023