FirstEnergy Corporation (FE)
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 | 2,515,000 | 2,529,000 | 2,441,000 | 2,672,000 | 2,165,000 |
| Interest expense | US$ in thousands | 1,011,000 | 1,027,000 | 955,000 | 1,066,000 | 988,000 |
| Interest coverage | 2.49 | 2.46 | 2.56 | 2.51 | 2.19 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,515,000K ÷ $1,011,000K
= 2.49
FirstEnergy Corporation's interest coverage ratio has shown a moderate improvement over the past five years, increasing from 2.19 in December 31, 2020 to 2.51 in December 31, 2021, and further to 2.56 in December 31, 2022. However, in the subsequent years, there has been a slight decline in the interest coverage ratio to 2.46 in December 31, 2023, and then a marginal improvement to 2.49 in December 31, 2024.
The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A ratio above 1 indicates the company can cover its interest payments, with higher ratios suggesting a stronger ability to meet debt obligations.
FirstEnergy Corporation's interest coverage ratios above 2 signify a moderate level of financial health in terms of meeting interest payments. However, the slight fluctuations in this ratio over the years may warrant further investigation into the company's debt structure and operating performance to ensure sustainable financial stability.
Peer comparison
Dec 31, 2024