The Ensign Group Inc (ENSG)
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 | 280,398 | 298,049 | 261,780 | 226,082 | 150,150 |
| Interest expense | US$ in thousands | 8,087 | 8,931 | 6,849 | 9,362 | 15,662 |
| Interest coverage | 34.67 | 33.37 | 38.22 | 24.15 | 9.59 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $280,398K ÷ $8,087K
= 34.67
The interest coverage ratio for Ensign Group Inc has shown strong and improving performance over the past five years. The ratio has been consistently above 1, indicating that the company has been able to cover its interest expenses comfortably with its operating income.
The trend of the interest coverage ratio has been increasing from 9.93 in 2019 to 31.58 in 2023. This signifies the company's ability to generate sufficient earnings to cover its interest obligations. A higher interest coverage ratio reflects a lower financial risk for the company as it indicates a greater margin of safety and ability to meet its interest payments even in adverse conditions.
Overall, the trend of increasing interest coverage ratio over the years indicates that Ensign Group Inc has been effectively managing its financial leverage and is in a strong position to meet its debt obligations.
Peer comparison
Dec 31, 2023