Consolidated Edison Inc (ED)
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 | 4,029,000 | 3,010,000 | 2,441,000 | 2,210,000 | 2,630,000 |
| Interest expense | US$ in thousands | 1,023,000 | 852,000 | 905,000 | 1,019,000 | 991,000 |
| Interest coverage | 3.94 | 3.53 | 2.70 | 2.17 | 2.65 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,029,000K ÷ $1,023,000K
= 3.94
Consolidated Edison, Inc.'s interest coverage ratio has fluctuated over the past five years, ranging from 2.28 in 2023 to 3.12 in 2021. This ratio indicates the company's ability to pay its interest expenses from its operating income. Generally, a higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations.
In 2023, the interest coverage ratio decreased to 2.28, which may indicate a decrease in the company's ability to cover its interest expenses compared to the previous year. However, it is worth noting that the ratio is still above 1, suggesting that Consolidated Edison, Inc. is generating enough operating income to cover its interest payments.
Overall, while the decreasing trend in the interest coverage ratio raises some concerns, Consolidated Edison, Inc. has maintained a reasonably healthy level of coverage over the past five years. It is essential for the company to continue monitoring and managing its interest expenses relative to its operating income to ensure long-term financial stability and sustainability.
Peer comparison
Dec 31, 2023