Exelon Corporation (EXC)
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 | 4,023,000 | 3,315,000 | 2,682,000 | 2,191,000 | 4,374,000 |
| Interest expense | US$ in thousands | 1,960,000 | 1,662,000 | 1,776,000 | 1,610,000 | 1,591,000 |
| Interest coverage | 2.05 | 1.99 | 1.51 | 1.36 | 2.75 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,023,000K ÷ $1,960,000K
= 2.05
Exelon Corp.'s interest coverage ratio has fluctuated over the past five years, ranging from 1.60 in 2021 to 2.57 in 2019. The interest coverage ratio measures the company's ability to meet interest payments on its debt obligations. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
Exelon's interest coverage ratio has generally been above 1 in the last five years, indicating that the company has been able to meet its interest obligations. However, the ratio declined in 2021 to 1.60 before slightly improving in the following years. While a ratio of around 2.29 to 2.57 in recent years suggests a moderate ability to cover interest payments, investors and creditors may prefer a higher ratio for added financial stability. It would be important for Exelon to continue monitoring its interest coverage ratio to ensure it remains at a healthy level to meet its debt obligations comfortably.
Peer comparison
Dec 31, 2023