Cleveland-Cliffs Inc (CLF)
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 | -756,000 | 677,000 | 1,939,000 | 4,012,000 | -142,000 |
| Interest expense | US$ in thousands | 15,000 | 23,000 | 17,000 | 15,000 | 57,000 |
| Interest coverage | -50.40 | 29.43 | 114.06 | 267.47 | -2.49 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-756,000K ÷ $15,000K
= -50.40
The interest coverage ratio for Cleveland-Cliffs Inc has fluctuated significantly over the past few years.
As of December 31, 2020, the interest coverage was very low at -2.49, indicating that the company's operating income was not sufficient to cover its interest expenses. This raises concerns about the company's ability to meet its debt obligations at that time.
By December 31, 2021, there was a remarkable improvement in the interest coverage ratio to 267.47, signifying a substantial increase in the company's ability to cover its interest expenses. This significant improvement indicates a healthier financial position and increased profitability.
In the following years, the interest coverage ratio remained positive but fluctuated: December 31, 2022 showed a ratio of 114.06, December 31, 2023 had a lower ratio of 29.43, and by December 31, 2024, the ratio deteriorated to -50.40.
The fluctuations in the interest coverage ratio over these years suggest potential changes in the company's profitability and ability to meet its interest obligations. It is crucial for stakeholders to monitor these ratios closely to assess the company's financial health and risk profile.
Peer comparison
Dec 31, 2024