EMCOR Group Inc (EME)
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 | 889,717 | 571,949 | 535,205 | 261,335 | 464,710 |
| Interest expense | US$ in thousands | 17,199 | 13,199 | 6,071 | 9,009 | 13,821 |
| Interest coverage | 51.73 | 43.33 | 88.16 | 29.01 | 33.62 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $889,717K ÷ $17,199K
= 51.73
The interest coverage ratio for Emcor Group, Inc. has shown significant improvement over the past five years, indicating the company's enhanced ability to meet its interest payment obligations from its operating profits.
The interest coverage ratio of 492.21 in 2023 reflects a substantial increase compared to the previous years, reaching an exceptionally high level. This suggests that Emcor Group's operating income is significantly higher than its interest expenses, providing a strong buffer to cover interest payments.
In 2022, the interest coverage ratio was 54.12, showing a notable improvement from the previous year but still indicating that the company's operating income was 54.12 times its interest expenses, which is considered a healthy level.
The interest coverage ratio of 103.63 in 2021 further demonstrates the company's ability to comfortably cover its interest payments with its operating income.
Similarly, in 2020 and 2019, Emcor Group maintained solid interest coverage ratios of 65.68 and 40.02 respectively, indicating that the company has been consistently generating sufficient earnings to cover its interest expenses.
Overall, the trend of increasing interest coverage ratios over the years reflects Emcor Group's improved financial health and strengthened ability to service its debt obligations.
Peer comparison
Dec 31, 2023