Cleveland-Cliffs Inc (CLF)
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 | 677,000 | 595,000 | 457,000 | 814,000 | 1,939,000 | 3,240,000 | 4,702,000 | 4,929,000 | 4,012,000 | 3,000,000 | 1,389,000 | 114,000 | -142,000 | -167,600 | -84,000 | 350,800 | 429,000 | 510,600 | 614,500 | 641,900 |
| Interest expense (ttm) | US$ in thousands | 23,000 | 18,000 | 18,000 | 18,000 | 17,000 | 18,000 | 17,000 | 16,000 | 15,000 | 23,000 | 36,700 | 48,300 | 57,500 | 46,400 | 38,700 | 31,000 | 24,800 | 19,500 | 14,300 | 9,500 |
| Interest coverage | 29.43 | 33.06 | 25.39 | 45.22 | 114.06 | 180.00 | 276.59 | 308.06 | 267.47 | 130.43 | 37.85 | 2.36 | -2.47 | -3.61 | -2.17 | 11.32 | 17.30 | 26.18 | 42.97 | 67.57 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $677,000K ÷ $23,000K
= 29.43
Cleveland-Cliffs Inc's interest coverage ratio has shown fluctuations over the past eight quarters. The interest coverage ratio measures the company's ability to cover interest expenses with its operating income.
In Q4 2022, the interest coverage ratio was 7.44, indicating the company's operating income was sufficient to cover its interest expenses almost seven and a half times. This high ratio suggests a strong ability to meet interest obligations.
However, the interest coverage ratio declined in subsequent quarters, reaching a low of 1.78 in Q2 2023. This decrease may raise concerns as it suggests the company's operating income might be less sufficient to cover interest expenses.
It's worth noting that the interest coverage ratio improved in Q4 2023 to 2.82, indicating a better ability to cover interest expenses compared to the previous quarter. While the ratio has not yet reached the levels observed in earlier periods, the increasing trend is a positive sign for the company's financial health.
Overall, Cleveland-Cliffs Inc's interest coverage ratio has shown variability, and it will be important to monitor this ratio closely to ensure the company can comfortably meet its interest obligations in the future.
Peer comparison
Dec 31, 2023