Frontier Communications Parent Inc (FYBR)

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	770,000	1,091,000	-72,000	276,000	-4,987,000
Interest expense	US$ in thousands	653,000	492,000	257	762,000	1,535,000
Interest coverage		1.18	2.22	-280.16	0.36	-3.25

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $770,000K ÷ $653,000K
= 1.18

Frontier Communications Parent Inc's interest coverage ratio has shown fluctuations over the past five years. In 2023, the ratio stood at 1.18, indicating that the company's operating income was only able to cover its interest expense barely. This suggests a lower level of financial flexibility compared to previous years. In 2022, the interest coverage improved to 2.22, showing a more comfortable ability to meet interest obligations. However, in 2021, the ratio dropped significantly to -280.16, suggesting a severe strain on the company's ability to cover interest expenses with its operating income. The negative ratio indicates that the company's operating income was insufficient to cover interest expenses during that period. In 2020, the interest coverage improved to 0.36 but still remained below one, indicating a precarious financial position. Furthermore, in 2019, the ratio was -3.25, showing a similar inability to cover interest expenses.

Overall, the trend in Frontier Communications Parent Inc's interest coverage ratio raises concerns about the company's ability to service its debt obligations. Investors and creditors may view the lower interest coverage ratios as a sign of heightened financial risk and may raise questions about the company's liquidity and financial stability.