Clean Harbors Inc (CLH)
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 | 612,439 | 634,747 | 347,887 | 251,336 | 229,456 |
| Interest expense | US$ in thousands | 10,651 | 6,411 | 2,544 | 1,523 | 1,415 |
| Interest coverage | 57.50 | 99.01 | 136.75 | 165.03 | 162.16 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $612,439K ÷ $10,651K
= 57.50
Clean Harbors, Inc.'s interest coverage has been steadily improving over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating profits. A higher ratio indicates a stronger ability to meet interest obligations.
In 2023, the interest coverage ratio stood at 5.64, slightly lower than the ratio in 2022 (5.90). Despite this slight decrease, the company continues to demonstrate a robust ability to cover its interest expenses. Compared to the ratio in 2019 (2.92), the significant improvement highlights the company's enhanced financial stability and efficiency in generating earnings relative to its interest costs.
Overall, Clean Harbors, Inc.'s consistent increase in interest coverage ratio is a positive sign for creditors and investors as it suggests a lower risk of default on interest payments and a higher capacity to take on additional debt if necessary.
Peer comparison
Dec 31, 2023