Encompass Health Corp (EHC)
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 | 887,000 | 750,700 | 630,200 | 659,400 | 572,200 |
| Interest expense | US$ in thousands | 137,400 | 143,500 | 175,700 | 164,600 | 184,200 |
| Interest coverage | 6.46 | 5.23 | 3.59 | 4.01 | 3.11 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $887,000K ÷ $137,400K
= 6.46
The interest coverage ratio for Encompass Health Corp has shown a generally positive trend over the years, indicating the company's ability to meet its interest payment obligations from its operating income. The ratio increased from 3.11 in December 31, 2020, to 6.46 in December 31, 2024. This improvement suggests that the company's earnings are sufficient to cover its interest expenses comfortably, providing a buffer against potential financial risks. Overall, the increasing trend in the interest coverage ratio reflects a stronger financial position for Encompass Health Corp and enhances its ability to service its debt obligations.
Peer comparison
Dec 31, 2024