EMCOR Group Inc (EME)
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 | 1,381,160 | 890,052 | 573,788 | 534,425 | 494,778 |
| Interest expense | US$ in thousands | 3,779 | 17,199 | 10,438 | 5,122 | 7,488 |
| Interest coverage | 365.48 | 51.75 | 54.97 | 104.34 | 66.08 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,381,160K ÷ $3,779K
= 365.48
EMCOR Group Inc's interest coverage ratio has shown variability over the past five years. As of December 31, 2020, the interest coverage ratio was 66.08, indicating that the company generated more than enough operating income to cover its interest expenses. The ratio significantly improved by December 31, 2021, reaching 104.34, reflecting a stronger ability to meet interest obligations.
However, there was a noticeable decline in the interest coverage ratio by December 31, 2022, dropping to 54.97. This may suggest a decrease in the company's operating income relative to its interest expenses, potentially indicating added financial strain. The trend continued in 2023, with a ratio of 51.75, indicating a further decrease in the company's ability to cover interest payments.
Remarkably, the interest coverage ratio experienced a substantial surge by December 31, 2024, reaching 365.48. This exceptional increase suggests a significant improvement in EMCOR Group Inc's financial performance, with operating income far exceeding its interest expenses.
Overall, EMCOR Group Inc's interest coverage ratio has shown fluctuations over the years, indicating varying levels of financial health and debt servicing capability. It is important for investors and stakeholders to monitor this ratio closely to assess the company's ability to meet its interest obligations in the future.
Peer comparison
Dec 31, 2024