EQT Corporation (EQT)

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	685,296	2,323,850	2,574,340	-1,281,030	-994,824
Interest expense	US$ in thousands	54,000	219,660	249,655	289,753	259,268
Interest coverage		12.69	10.58	10.31	-4.42	-3.84

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $685,296K ÷ $54,000K
= 12.69

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.

Looking at the data provided for EQT Corporation, the interest coverage ratio has shown significant improvement over the years.

- As of December 31, 2020, the interest coverage ratio was -3.84, indicating that the company's earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses.
- By December 31, 2021, the ratio worsened slightly, dropping to -4.42, suggesting a further decline in the company's ability to cover interest payments.
- However, the trend reversed in the following years, with the interest coverage ratios for December 31, 2022, 2023, and 2024 improving to 10.31, 10.58, and 12.69, respectively.

This upward trend in the interest coverage ratio indicates that EQT Corporation has significantly enhanced its ability to pay interest obligations from its operating earnings. The company's improved financial performance and profitability have strengthened its capacity to service its debts, which is a positive indicator for investors and creditors.