CMS Energy Corporation (CMS)
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 | 1,487,000 | 1,677,000 | 1,449,000 | 1,948,000 | 1,375,000 |
| Interest expense | US$ in thousands | 682,000 | 643,000 | 519,000 | 500,000 | 505,000 |
| Interest coverage | 2.18 | 2.61 | 2.79 | 3.90 | 2.72 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,487,000K ÷ $682,000K
= 2.18
The interest coverage ratio for CMS Energy Corporation has varied over the years based on the provided data. In 2020, the interest coverage was 2.72, indicating that the company's operating income was able to cover its interest expenses 2.72 times.
Subsequently, in 2021, the interest coverage improved to 3.90, suggesting a stronger ability to meet interest obligations from operating earnings. However, in 2022, the ratio dropped to 2.79, indicating a slight decrease in the company's ability to cover its interest expenses.
In 2023, the interest coverage further decreased to 2.61, signaling a potential strain on the company's ability to cover interest costs with operating income. Finally, in 2024, the interest coverage ratio declined to 2.18, indicating a further reduction in the company's ability to cover interest expenses.
Overall, the fluctuating trend in CMS Energy Corporation's interest coverage suggests varying levels of risk regarding the company's ability to meet its interest obligations with operating profit over the years. It would be important for stakeholders to monitor this ratio closely to assess the company's financial stability and risk management strategies.
Peer comparison
Dec 31, 2024