Comstock Resources Inc (CRK)

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	-157,208	416,007	1,573,040	-11,837	173,202
Interest expense	US$ in thousands	210,621	169,018	171,092	218,485	234,829
Interest coverage		-0.75	2.46	9.19	-0.05	0.74

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-157,208K ÷ $210,621K
= -0.75

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt with its operating income. A higher ratio indicates better financial health and a lower risk of default.

Based on the provided data:
- As of December 31, 2020, Comstock Resources Inc had an interest coverage ratio of 0.74, indicating that its operating income was only able to cover 74% of its interest expenses.
- By December 31, 2021, the interest coverage ratio decreased significantly to -0.05, implying that the company's operating income was insufficient to cover its interest payments, raising concerns about its ability to service its debt obligations.
- However, as of December 31, 2022, the interest coverage ratio significantly improved to 9.19, which suggests that the company's operating income was more than sufficient to cover its interest expenses, indicating a healthier financial position.
- By December 31, 2023, the interest coverage ratio decreased to 2.46, although it still indicates that the company's operating income could cover its interest payments adequately.
- As of December 31, 2024, the interest coverage ratio dropped to -0.75, indicating a negative position where the company's operating income was insufficient to cover its interest obligations, putting financial strain on the company.

In summary, the interest coverage ratio for Comstock Resources Inc has shown fluctuations over the years, with both positive and concerning trends in its ability to meet interest obligations based on its operating income. Management should monitor this ratio closely to ensure the company's financial health and debt repayment capability.