Chesapeake Utilities Corporation (CPK)
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 | 230,200 | 152,764 | 142,933 | 132,805 | 112,375 |
| Interest expense | US$ in thousands | 68,400 | 36,951 | 24,356 | 20,135 | 21,765 |
| Interest coverage | 3.37 | 4.13 | 5.87 | 6.60 | 5.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $230,200K ÷ $68,400K
= 3.37
Chesapeake Utilities Corporation's interest coverage ratio has exhibited fluctuations over the past five years. The ratio, which measures the company's ability to meet its interest obligations, stood at 5.16 in December 2020, indicating that the company generated 5.16 times the amount of earnings necessary to cover its interest expenses for that year.
By December 2021, the interest coverage ratio improved to 6.60, reflecting a stronger ability to service its debt obligations. However, in the subsequent year, the ratio declined slightly to 5.87, suggesting a slight decrease in the company's ability to cover its interest costs.
In December 2023, the interest coverage ratio decreased notably to 4.13, indicating a potential strain on the company's ability to meet its interest payments with its earnings. This decline may raise concerns about the company's financial health and its ability to service its debt.
The trend continued in December 2024, with the interest coverage ratio falling further to 3.37. A lower ratio suggests that the company's earnings are increasingly insufficient to cover its interest expenses, signifying a heightened risk of default on its debt obligations.
Overall, the fluctuating trend in Chesapeake Utilities Corporation's interest coverage ratio over the years highlights the importance of closely monitoring the company's financial performance and debt management practices to ensure its long-term financial stability and solvency.
Peer comparison
Dec 31, 2024