Compass Minerals International Inc (CMP)

Interest coverage

		Mar 31, 2024	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	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	-86,300	5,400	88,400	98,100	91,000	75,500	65,100	125,500	-61,600	-58,600	-53,600	-118,000	127,900	170,300	183,300	174,500	140,000	127,400	124,700	126,300
Interest expense (ttm)	US$ in thousands	60,300	57,400	55,500	56,400	55,500	55,200	55,200	56,200	58,500	60,100	63,300	63,700	64,600	66,800	67,400	68,800	68,400	57,400	55,600	53,700
Interest coverage		-1.43	0.09	1.59	1.74	1.64	1.37	1.18	2.23	-1.05	-0.98	-0.85	-1.85	1.98	2.55	2.72	2.54	2.05	2.22	2.24	2.35

March 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-86,300K ÷ $60,300K
= -1.43

Interest coverage is a financial ratio that indicates a company's ability to meet its interest payment obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses. A higher interest coverage ratio is indicative of a stronger ability to cover interest payments.

Looking at the interest coverage trend of Compass Minerals International Inc over the past few quarters, there appears to be some volatility in the ratio.

- The interest coverage ratio was negative in multiple quarters, indicating that the company's EBIT was not sufficient to cover its interest expenses during those periods.
- In some quarters, such as Jun 30, 2022, and Mar 31, 2020, the interest coverage ratio improved significantly, indicating better ability to cover interest payments.
- However, the ratio dipped again in subsequent periods.

Overall, the company's interest coverage ratio has shown inconsistency, with both positive and negative values observed. This inconsistency suggests fluctuating profitability levels relative to interest expenses, which may warrant further investigation into the company's financial health and debt management practices.