Equifax Inc (EFX)
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 | 1,039,600 | 959,300 | 1,112,700 | 1,094,800 | 826,800 |
| Interest expense | US$ in thousands | 229,100 | 241,400 | 183,000 | 145,600 | 141,600 |
| Interest coverage | 4.54 | 3.97 | 6.08 | 7.52 | 5.84 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,039,600K ÷ $229,100K
= 4.54
The interest coverage ratio for Equifax Inc has seen fluctuations over the past five years. In December 31, 2020, the ratio was 5.84, indicating that the company generated sufficient operating income to cover its interest expenses nearly 6 times. This ratio improved in the following years, reaching 7.52 by December 31, 2021, signaling even stronger ability to meet interest payments.
However, there was a slight decline in the interest coverage ratio to 6.08 by December 31, 2022, which still indicates a healthy coverage of interest expenses. The ratio then dropped notably to 3.97 by December 31, 2023, suggesting a reduced ability to cover interest payments.
By December 31, 2024, the interest coverage ratio improved slightly to 4.54, but it remained below the levels seen in 2021 and 2022. Overall, while the company experienced fluctuation in its interest coverage ratio over the past years, it is essential for Equifax Inc to closely monitor and manage its ability to cover interest expenses effectively to ensure financial stability and sustainability.