Crescent Energy Co (CRGY)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	243,293	219,445	145,518	236,683	157,633	372,821	424,624	228,949	183,818
Interest expense (ttm)	US$ in thousands	190,044	170,404	159,173	145,807	130,067	114,924	108,733	95,937	81,448
Interest coverage		1.28	1.29	0.91	1.62	1.21	3.24	3.91	2.39	2.26

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $243,293K ÷ $190,044K
= 1.28

Interest coverage is a financial ratio that helps assess a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.

Analyzing Crescent Energy Co's interest coverage ratio over the past nine quarters, we observe fluctuations in the company's ability to cover its interest expenses. The interest coverage ratio ranged from a low of 0.91 in March 2024 to a high of 3.91 in March 2023.

The interest coverage ratio of below 1 in March 2024 (0.91) suggests that Crescent Energy Co's operating income was not sufficient to cover its interest expenses during that period, potentially indicating financial stress. However, the company's interest coverage improved in subsequent quarters, reaching a ratio of 3.91 in March 2023, indicating a significant improvement in its ability to cover interest payments.

Overall, the fluctuating trend in Crescent Energy Co's interest coverage ratio may signal varying levels of financial stability and operational efficiency. It is important for investors and stakeholders to closely monitor these ratios to assess the company's financial health and debt repayment capacity.