Clean Harbors Inc (CLH)
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 | 670,232 | 612,439 | 634,747 | 347,887 | 251,336 |
| Interest expense | US$ in thousands | 11,200 | 10,651 | 6,411 | 2,544 | 1,523 |
| Interest coverage | 59.84 | 57.50 | 99.01 | 136.75 | 165.03 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $670,232K ÷ $11,200K
= 59.84
Clean Harbors Inc's interest coverage has displayed a declining trend over the past five years, indicating a potential decrease in its ability to cover interest expenses with its earnings before interest and taxes. In 2020, the interest coverage ratio was strong at 165.03, reflecting a comfortable cushion to meet interest obligations. However, this ratio decreased to 136.75 in 2021, and further to 99.01 in 2022, suggesting a reduction in the company's ability to cover interest expenses.
By the end of 2023, the interest coverage ratio dropped significantly to 57.50, indicating a potential strain on the company's ability to cover interest costs. Although there was a slight increase to 59.84 by the end of 2024, the ratio remains relatively low compared to previous years, indicating that the company may still be facing challenges in meeting its interest obligations from its operating income.
Overall, the declining trend in Clean Harbors Inc's interest coverage raises concerns about its financial health and ability to service its debt obligations. Further analysis of the company's financial performance and debt management strategies would be crucial in determining the impact of these trends on its overall financial stability.