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.
Peer comparison
Dec 31, 2023