Geo Group Inc (GEO)
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 | 361,016 | 399,262 | 329,608 | 260,332 | 334,275 |
| Interest expense | US$ in thousands | 218,292 | 164,550 | 129,460 | 126,837 | 151,024 |
| Interest coverage | 1.65 | 2.43 | 2.55 | 2.05 | 2.21 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $361,016K ÷ $218,292K
= 1.65
The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Geo Group, Inc.'s interest coverage has shown a declining trend over the past five years, from 2.54 in 2019 to 1.70 in 2023. This indicates a potential increase in the financial risk associated with the company's debt obligations.
A ratio below 1 would imply that the company is not generating enough operating income to cover its interest expenses, which could raise concerns about its financial health and ability to meet debt obligations.
It is crucial for investors and stakeholders to closely monitor the interest coverage ratio to assess the company's financial stability and debt repayment capabilities. Geo Group, Inc. may need to take steps to improve its interest coverage ratio, such as increasing profitability or restructuring its debt, to mitigate financial risks in the future.
Peer comparison
Dec 31, 2023