HF Sinclair Corp (DINO)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 383,000 | 2,345,350 | 4,107,250 | 924,143 | -624,769 |
| Interest expense | US$ in thousands | 165,000 | 190,796 | 175,628 | 125,175 | 126,527 |
| Interest coverage | 2.32 | 12.29 | 23.39 | 7.38 | -4.94 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $383,000K ÷ $165,000K
= 2.32
HF Sinclair Corp's interest coverage ratio has displayed significant fluctuations over the past five years. In December 2020, the company's interest coverage was negative at -4.94, indicating that its operating income was insufficient to cover its interest expenses, raising concerns about its financial stability. However, by December 2021, the interest coverage improved to 7.38, suggesting that the company's ability to pay off its interest obligations had strengthened.
Subsequently, in December 2022, HF Sinclair Corp's interest coverage ratio showed a substantial increase to 23.39, signaling a robust capacity to meet interest payments from its operating earnings. However, there was a decline in the interest coverage to 12.29 by December 2023, though still at a healthy level, indicating that the company may have faced some challenges in generating sufficient earnings to cover its interest costs.
Notably, by December 2024, the interest coverage ratio dropped significantly to 2.32, signaling a possible strain on the company's ability to cover its interest expenses with its operating income. Overall, while HF Sinclair Corp has displayed fluctuations in its interest coverage ratio over the years, it is essential for stakeholders to monitor future trends to assess the company's financial health and ability to meet its debt obligations.