California Resources Corp (CRC)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 620,000 | 835,000 | 302,000 | 411,000 | 808,000 | 657,000 | 1,263,000 | 1,394,000 | 812,000 | 1,012,000 | 543,000 | 175,000 | 291,000 | -147,000 | -282,000 | -307,000 | -1,883,000 | -1,675,000 | -1,514,000 | -1,277,000 |
| Interest expense (ttm) | US$ in thousands | 87,000 | 72,000 | 58,000 | 55,000 | 56,000 | 57,000 | 55,000 | 54,000 | 53,000 | 53,000 | 54,000 | 54,000 | 54,000 | 57,000 | 71,000 | 143,000 | 217,000 | 290,000 | 357,000 | 370,000 |
| Interest coverage | 7.13 | 11.60 | 5.21 | 7.47 | 14.43 | 11.53 | 22.96 | 25.81 | 15.32 | 19.09 | 10.06 | 3.24 | 5.39 | -2.58 | -3.97 | -2.15 | -8.68 | -5.78 | -4.24 | -3.45 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $620,000K ÷ $87,000K
= 7.13
The interest coverage ratio for California Resources Corp has exhibited significant fluctuations over the period from March 31, 2020, to December 31, 2024. The company's interest coverage ratio started with negative values, indicating that the company's operating income was insufficient to cover its interest expenses during the initial period. However, there has been a noticeable improvement in the interest coverage ratio over time, with the ratio gradually increasing from negative values to positive territory.
From March 31, 2021, to June 30, 2022, the interest coverage ratio remained in negative territory, suggesting continued challenges in generating sufficient operating income to cover interest expenses. However, from September 30, 2022, the interest coverage ratio saw a significant turnaround, reaching double-digit values, which indicates that the company's operating income became more than adequate to cover its interest obligations.
The trend continued to be positive until September 30, 2023, with the interest coverage ratio remaining relatively stable at elevated levels, signifying a strong ability to meet interest payments. However, there was a slight decrease in the ratio by December 31, 2023, and March 31, 2024, which might suggest a slight dip in the company's ability to cover its interest expenses efficiently.
Overall, the upward trend in the interest coverage ratio from negative values to double-digit positive values indicates an improvement in California Resources Corp's ability to service its debt obligations with operating income. The management should continue to monitor and maintain a healthy interest coverage ratio to ensure financial stability and meet its debt obligations effectively.
Peer comparison
Dec 31, 2024