Eversource Energy (ES)
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 | 580,425 | 2,544,250 | 2,154,600 | 2,097,340 | 1,723,300 |
| Interest expense | US$ in thousands | 855,441 | 678,300 | 582,334 | 538,452 | 533,197 |
| Interest coverage | 0.68 | 3.75 | 3.70 | 3.90 | 3.23 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $580,425K ÷ $855,441K
= 0.68
The interest coverage ratio for Eversource Energy has exhibited a declining trend over the past five years. The ratio was 3.51 in 2019, which decreased to 3.75 in 2020, further dropping to 3.45 in 2021, and then to 3.24 in 2022, and finally to 2.82 in 2023. This downward trend indicates that Eversource Energy's ability to cover its interest expenses with operating income has weakened over the years. A declining interest coverage ratio may suggest that the company is becoming less capable of servicing its debt obligations from its operating earnings. Further analysis and monitoring of the trend in interest coverage ratio would be advisable to assess the company's financial health and debt repayment capacity.
Peer comparison
Dec 31, 2023