Darling Ingredients Inc (DAR)
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 | 966,517 | 1,009,880 | 877,097 | 422,794 | 450,741 |
| Interest expense | US$ in thousands | 259,223 | 125,566 | 62,077 | 72,686 | 78,674 |
| Interest coverage | 3.73 | 8.04 | 14.13 | 5.82 | 5.73 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $966,517K ÷ $259,223K
= 3.73
The interest coverage ratio for Darling Ingredients Inc has shown some fluctuations over the past five years. The ratio has steadily declined from 14.13 in 2021 to 3.73 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over time.
A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations from its operating earnings. Conversely, a declining ratio may indicate that the company's operating income is becoming less sufficient to cover its interest expenses, potentially signaling financial distress.
It is important for investors and stakeholders to closely monitor changes in the interest coverage ratio as it can provide valuable insights into the company's financial health and ability to meet its debt obligations. Further analysis of the company's financial statements and market conditions is recommended to fully assess the implications of the fluctuations in the interest coverage ratio for Darling Ingredients Inc.
Peer comparison
Dec 31, 2023