CSX Corporation (CSX)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,561,000 | 5,700,000 | 5,984,000 | 6,205,000 | 6,023,000 | 5,930,000 | 5,787,000 | 5,775,000 | 5,594,000 | 5,443,000 | 5,148,000 | 4,285,000 | 4,362,000 | 4,301,000 | 4,447,000 | 4,924,000 | 4,965,000 | 5,060,000 | 5,066,000 | 5,044,000 |
| Interest expense (ttm) | US$ in thousands | 169,000 | 164,000 | 131,000 | 102,000 | 61,000 | 42,000 | 121,000 | 164,000 | 190,000 | 199,000 | 199,000 | 196,000 | 188,000 | 188,000 | 172,000 | 172,000 | 187,000 | 169,000 | 178,000 | 49,000 |
| Interest coverage | 32.91 | 34.76 | 45.68 | 60.83 | 98.74 | 141.19 | 47.83 | 35.21 | 29.44 | 27.35 | 25.87 | 21.86 | 23.20 | 22.88 | 25.85 | 28.63 | 26.55 | 29.94 | 28.46 | 102.94 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,561,000K ÷ $169,000K
= 32.91
CSX Corp.'s interest coverage ratio has remained relatively stable over the past eight quarters, ranging from a low of 7.37 in Q3 2023 to a high of 8.29 in Q1 2023. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt with its earnings before interest and taxes (EBIT).
An interest coverage ratio above 1 indicates that the company is generating enough earnings to cover its interest payments. CSX Corp.'s consistently strong interest coverage ratios above 7 suggest that the company has a comfortable buffer to meet its interest obligations and is in good financial health. Moreover, the slight fluctuations in the ratios do not raise significant concerns as they remain well above the generally acceptable threshold of 2.
Overall, the trend of CSX Corp.'s interest coverage ratios indicates that the company has a solid ability to manage its debt and interest expenses, providing a positive signal to creditors and investors regarding the company's financial stability.
Peer comparison
Dec 31, 2023