Consolidated Edison Inc (ED)
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 | 3,325,000 | 4,031,000 | 2,978,000 | 2,688,000 | 2,451,000 |
| Interest expense | US$ in thousands | 1,187,000 | 1,023,000 | 951,000 | 919,000 | 1,019,000 |
| Interest coverage | 2.80 | 3.94 | 3.13 | 2.92 | 2.41 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,325,000K ÷ $1,187,000K
= 2.80
Sure, based on the data provided for Consolidated Edison Inc's interest coverage ratio over the past five years, we observe the following trends:
- In December 31, 2020, the interest coverage ratio was 2.41, indicating that the company earned 2.41 times the amount needed to cover its interest expenses. This level suggests moderate financial health and the ability to meet interest obligations with some margin of safety.
- The interest coverage ratio increased to 2.92 as of December 31, 2021, indicating an improvement in the company's ability to cover its interest expenses. This may reflect better operational performance, increased profitability, or reduced interest costs.
- By December 31, 2022, the interest coverage ratio further improved to 3.13, showing a positive trend in the company's ability to service its debt obligations. A higher interest coverage ratio suggests a lower risk of default on debt payments.
- As of December 31, 2023, the interest coverage ratio rose to 3.94, reaching its peak over the five-year period. A higher interest coverage ratio indicates a stronger ability to handle interest payments and a lower risk of financial distress.
- However, the interest coverage ratio slightly declined to 2.80 by December 31, 2024, signaling a decrease in the company's ability to cover interest expenses compared to the previous year. This reduction may warrant further examination to determine the factors driving this change.
Overall, the trend in Consolidated Edison Inc's interest coverage ratio shows a generally positive trajectory over the five-year period, with fluctuations in certain years. The company's improving ability to cover interest expenses suggests a stronger financial position and reduced risk of default on debt obligations.
Peer comparison
Dec 31, 2024