Diamondback Energy Inc (FANG)
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 | 4,789,000 | 4,425,000 | 5,994,000 | 3,101,000 | -5,575,000 |
| Interest expense | US$ in thousands | 288,000 | 177,000 | 159,000 | 199,000 | 197,000 |
| Interest coverage | 16.63 | 25.00 | 37.70 | 15.58 | -28.30 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,789,000K ÷ $288,000K
= 16.63
The interest coverage ratio for Diamondback Energy Inc has shown significant fluctuations over the years. In December 31, 2020, the interest coverage was negative at -28.30, indicating that the company's earnings before interest and taxes were insufficient to cover its interest expenses.
However, there has been a positive turnaround in the subsequent years. By December 31, 2021, the interest coverage improved to 15.58, suggesting that the company's EBIT was more than sufficient to cover its interest payments.
The trend continued to strengthen over the following years, reaching 37.70 by December 31, 2022, 25.00 by December 31, 2023, and 16.63 by December 31, 2024. These figures indicate a healthy improvement in Diamondback Energy Inc's ability to meet its interest obligations through its operational earnings.
Overall, the positive trend in interest coverage ratios reflects the company's improved financial health and ability to manage its interest expenses effectively over the years.
Peer comparison
Dec 31, 2024