California Resources Corp (CRC)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 808,000 | 812,000 | 293,000 | 429,000 | 769,000 |
| Interest expense | US$ in thousands | 56,000 | 53,000 | 54,000 | 383,000 | 379,000 |
| Interest coverage | 14.43 | 15.32 | 5.43 | 1.12 | 2.03 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $808,000K ÷ $56,000K
= 14.43
California Resources Corporation's interest coverage ratio has shown an improving trend over the past three years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt, with a higher ratio indicating a stronger ability to do so.
In 2021, the interest coverage ratio was 4.04, indicating that the company generated 4.04 times more earnings before interest and taxes (EBIT) than the interest expenses incurred during that period. This ratio improved significantly in 2022 to 14.23, reflecting a stronger financial position and ability to cover interest obligations. Furthermore, in 2023, the interest coverage ratio further increased to 13.75, demonstrating continued improvement in the company's ability to service its debt.
Overall, the increasing trend in California Resources Corporation's interest coverage ratio is a positive indicator of its financial health and ability to meet its debt obligations. Investors and creditors may view this trend favorably, as it suggests that the company's earnings are sufficient to cover its interest payments, reducing the risk of default.
Peer comparison
Dec 31, 2023