California Water Service Group (CWT)

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	77,135	127,660	126,770	136,666	99,412
Interest expense	US$ in thousands	47,019	42,244	41,730	38,983	37,898
Interest coverage		1.64	3.02	3.04	3.51	2.62

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $77,135K ÷ $47,019K
= 1.64

The interest coverage ratio for California Water Service Group has exhibited some fluctuations over the past five years, ranging from 1.92 to 3.46. The ratio measures the company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of meeting its interest obligations.

In 2023, the interest coverage ratio decreased to 1.92, a significant drop from the previous year's ratio of 3.36. This decrease may raise concerns about the company's ability to cover its interest expenses effectively with its operating income.

Despite the decline in 2023, it is important to note that California Water Service Group's interest coverage ratio has generally remained above 1.5 over the past five years, indicating a relatively healthy financial position. However, investors and creditors may monitor future trends in the interest coverage ratio to assess the company's ability to manage its debt obligations and financial risks effectively.