Entergy Corporation (ETR)
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 | 2,645,800 | 2,678,180 | 1,970,400 | 2,144,790 | 2,070,810 |
Interest expense | US$ in thousands | 1,203,590 | 1,006,410 | 987,818 | 834,694 | 785,663 |
Interest coverage | 2.20 | 2.66 | 1.99 | 2.57 | 2.64 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,645,800K ÷ $1,203,590K
= 2.20
Entergy Corporation's interest coverage ratio has shown some fluctuation over the past five years. The ratio was 2.64 in 2020, slightly decreasing to 2.57 in 2021, and then dropping more notably to 1.99 by the end of 2022. However, there was a slight improvement in 2023 with the interest coverage ratio increasing to 2.66, before falling again to 2.20 in 2024.
Overall, Entergy Corporation's interest coverage ratio indicates the company's ability to meet its interest obligations from its operating income. However, the decreasing trend from 2020 to 2022 may raise concerns about the company's ability to comfortably cover its interest expenses. The slight recovery in 2023 followed by a decline in 2024 suggests some volatility in the company's ability to generate enough earnings to cover its interest payments. Monitoring this ratio closely will be crucial to ensure the company's financial health and ability to service its debt obligations effectively.
Peer comparison
Dec 31, 2024