Expand Energy Corporation (EXE)

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	-718,000	3,229,000	3,811,000	6,306,000	-9,293,000
Interest expense	US$ in thousands	130,000	112,000	163,000	84,000	476,000
Interest coverage		-5.52	28.83	23.38	75.07	-19.52

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-718,000K ÷ $130,000K
= -5.52

Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that Expand Energy Corporation is more capable of meeting its interest obligations.

Looking at the historical data, the interest coverage ratio for Expand Energy Corporation was negative at -19.52 as of December 31, 2020, which indicates that the company's operating income was insufficient to cover its interest expenses. However, the situation improved significantly by December 31, 2021, with the interest coverage ratio increasing to a healthy 75.07, suggesting a strong ability to cover interest payments.

In the following years, the interest coverage ratio remained relatively stable, ranging from 23.38 to 28.83, indicating that Expand Energy Corporation was able to comfortably cover its interest expenses. However, there was a slight drop in the interest coverage ratio to -5.52 as of December 31, 2024, which is concerning as it signifies that the company's operating income may not be sufficient to cover its interest payments.

Overall, Expand Energy Corporation has shown improved financial health in terms of interest coverage ratio over the years, but the negative ratio in 2024 raises a red flag and requires further investigation to ensure the sustainability of the company's operations and financial stability.