CoreCivic Inc (CXW)
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 | 168,783 | 250,294 | 171,645 | 141,842 | 281,126 |
| Interest expense | US$ in thousands | 72,960 | 84,974 | 85,542 | 83,299 | 84,401 |
| Interest coverage | 2.31 | 2.95 | 2.01 | 1.70 | 3.33 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $168,783K ÷ $72,960K
= 2.31
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. Calculated as earnings before interest and taxes (EBIT) divided by interest expense, a higher ratio indicates a stronger capability to cover interest payments.
Analyzing CoreCivic Inc's interest coverage over the past five years, we observe fluctuations in the ratio. In 2023, the interest coverage ratio improved to 2.34 from 2.07 in 2022, indicating the company generated 2.34 times the EBIT compared to its interest expenses. This suggests an enhanced ability to meet interest obligations.
In 2021, the interest coverage ratio peaked at 2.98, signifying a robust ability to cover interest expenses. While the ratio decreased slightly in 2022 and 2023, it remained above 2, reflecting a relatively stable financial position.
Comparing these figures to 2019 and 2020, where the interest coverage ratio was 1.88 and 2.69 respectively, we see a mixed performance. The upward trend from 2019 to 2021 and the subsequent fluctuations in 2022 and 2023 indicate some variability in the company's capacity to service its debt through operating income.
Overall, CoreCivic Inc's interest coverage ratio shows a generally positive trend in recent years. However, it is crucial for investors and analysts to continue monitoring this ratio to ensure the company maintains its ability to meet interest obligations in the long term.
Peer comparison
Dec 31, 2023