FTI Consulting Inc (FCN)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 372,723 | 331,917 | 315,222 | 294,326 | 307,796 | 293,565 | 291,792 | 307,631 | 318,241 | 332,963 | 308,985 | 293,718 | 282,251 | 260,124 | 275,505 | 298,408 | 307,656 | 301,770 | 288,202 | 261,803 |
| Interest expense (ttm) | US$ in thousands | 14,331 | 13,014 | 10,918 | 10,344 | 10,047 | 12,598 | 15,293 | 18,139 | 20,294 | 19,800 | 19,878 | 19,741 | 19,805 | 20,004 | 19,685 | 19,321 | 19,206 | 21,447 | 23,861 | 25,651 |
| Interest coverage | 26.01 | 25.50 | 28.87 | 28.45 | 30.64 | 23.30 | 19.08 | 16.96 | 15.68 | 16.82 | 15.54 | 14.88 | 14.25 | 13.00 | 14.00 | 15.44 | 16.02 | 14.07 | 12.08 | 10.21 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $372,723K ÷ $14,331K
= 26.01
The interest coverage ratio measures a company's ability to meet its interest obligations on its outstanding debt. A higher interest coverage ratio indicates that the company is more capable of covering its interest expenses with its operating income.
FTI Consulting Inc.'s interest coverage ratio has been relatively high and stable over the past eight quarters. In Q4 2023, the interest coverage reached 41.39, showing a slight decrease from the previous quarter but still reflecting a strong ability to cover interest payments. This is supported by the ratios from earlier quarters which have consistently been above 20.
The trend of increasing interest coverage ratios from Q2 2022 to Q2 2023, peaking at 51.47 in Q2 2023, indicates that FTI Consulting Inc. has been improving its ability to cover interest expenses with its operating income. This trend suggests that the company's financial health has been strengthening over time.
Overall, FTI Consulting Inc.'s interest coverage ratio demonstrates a sound financial position and indicates the company's capacity to meet its interest obligations comfortably. However, investors and creditors should continue to monitor this ratio to ensure that the trend of improvement continues in the future.
Peer comparison
Dec 31, 2023