CVR Energy Inc (CVI)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,123,000	963,000	87,000	-333,000	580,000
Interest expense	US$ in thousands	12,000	5,000	5,000	6,000	6,000
Interest coverage		93.58	192.60	17.40	-55.50	96.67

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,123,000K ÷ $12,000K
= 93.58

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates a greater capacity to meet interest obligations.

Looking at the data for CVR Energy Inc, we observe a fluctuating trend in the interest coverage ratio over the past five years. In 2023, the interest coverage ratio significantly improved to 21.63, demonstrating a substantial increase in the company's ability to cover its interest expenses compared to the previous year.

In 2022, the interest coverage ratio was 11.46, indicating a moderate level of interest coverage. However, in 2021, the ratio dropped to a concerning level of 0.77, suggesting that the company may have struggled to meet its interest obligations from its earnings.

The year 2020 reflects a negative interest coverage ratio of -2.19, indicating that the company's earnings were insufficient to cover its interest expenses, which could signal financial distress.

In 2019, the interest coverage ratio improved to 5.65, representing a moderate level of interest coverage and a positive trend compared to the previous years.

Overall, the improvement in the interest coverage ratio in 2023 is a positive sign for CVR Energy Inc, indicating a stronger ability to meet its interest obligations from its earnings. However, the fluctuating nature of the ratio in recent years suggests that the company may need to continue monitoring and managing its debt levels and earnings to ensure sustainable financial health.